Matter 9

25996/A3/JB/MXS/sw 1 8th February 2019

NORTH WARWICKSHIRE BOROUGH COUNCIL LOCAL PLAN EXAMINATION

STATEMENT ON BEHALF OF STOFORD DEVELOPMENTS – ID SLP335

MATTER 9 – ALLOCATIONS AND SUPPLY OF LAND FOR DEVELOPMENT REQUIREMENTS

Barton Willmore are instructed by Stoford Developments Ltd in connection with their land interests at two

sites south of Coleshill: (1) Land at Brickhill Farm and (2) Land at Stonebridge Road and their promotion

for employment development through the North Warwickshire Local Plan.

Our Statement focuses on matters timetabled for discussion at the hearing session on 2nd April 2019, i.e.

to review the outstanding business in relation to matters 1 to 8 (AM); and the site allocations –

overarching issues (PM). Our focus continues to be the submitted Plan’s failure to address wider than

local employment needs.

AM hearing session

In response to the points raised by the Inspector in his Admin Note:

Matter 5

3. Other local authorities monitor employment delivery by floorspace and we are aware the Council’s

Annual Monitoring Report (2012) monitors commercial completions in both hectares and

floorspace. Mrs Barratt confirmed during the Hearings that they could monitor by floorspace and

this should be required via modification of the submitted plan.

6. NWBC21 Employment Completions 2011-2018 does not provide a breakdown between Classes B1,

B2 and B8. In addition, there are issues of consistency between the proposed uses for the draft

allocations in Table 6 and the policy text in the Submission Plan (see our response to MIQ 9.9).

These issues need to be addressed under Matter 9.6.

7. The revised West Midlands Local Industrial Strategy, as approved by the WCMA Board on 11th

January 2019 (appended) should be added to the Examination Library and needs to be taken into

account. The West Midlands Local Industrial Strategy at [AD42] is the original version.

8. See appended note on MM39. It should also be noted that phase 2 of the West Midlands Strategic

Employment Site Study (WMSESS) is already delayed, and further delay to its publication is

expected. Further, a Local Plan Review will take a substantial time taken to complete, if and when

Matter 9

25996/A3/JB/MXS/sw 2 8th February 2019

triggered by the WMSESS. However the need and demand for strategic employment land in the

area is immediate and pressing, hence the need for a policy which facilitates an immediate and

positive response.

Matter 9 – PM session

9.4 Has the comparative assessment of sites resulting in those included for allocation in the

plan been undertaken in a proportionate and consistent manner? (with particular regard to

the SHLAA [CD8/17] and SA for site allocations, section 2 in particular [CD3/1]).

1. We continue to raise concern with the approach to assessing employment requirements,

particularly as wider than local needs have not been addressed. Further, and as set out in our

response to MIQ 4.4 and 4.5, the alternative growth scenario of employment land along the M42

corridor should have been assessed through the Sustainability Assessment.

9.6 There are several existing employment sites referred to throughout the plan, the history

or status of which is not readily identifiable. Local Plan table 8 indicates that since 2011

completions have amounted to 3.22 hectares of some form of employment land, and that

extant permissions amount to around 31.58 hectares. However those figures do not readily

tally with those in policy LP40 or in NWBC21. Are the figures in respect of employment land

delivery and extant consents current and supported by appropriate evidence?

2. The Inspector has requested that additional information is provided regarding the employment

allocations and commitments shown in Employment Completions 2011-2018 [NWBC21] and we

note that the Council are in the process of producing a more detailed table to ensure there is

clarity on the commercial uses proposed and reserve the right to comment on it in due course.

However, and as we have previously noted (see our response to MIQ 5.2), given the Council’s

latest Employment Land Review [CD8/8], it is important that the level of Class B8 floorspace is

known.

9.9 Do allocations for housing and employment, were they to be subject to MM9 and MM39

[NWBC20A], contain sufficient flexibility or contingency for future change and to ensure

delivery in line with forecasts?

Matter 9

25996/A3/JB/MXS/sw 3 8th February 2019

3. For the avoidance of doubt, our concern lies with the Plan’s lack of provision for strategic Class

B8 floorspace and MM39 aims to address this shortcoming.

WMCA Board

Date 11 January 2019

Report title West Midlands Local Industrial Strategy

Portfolio Lead Economic Growth - Councillor Ian Ward

Accountable Chief Executive

Deborah Cadman, West Midlands Combined Authority

Accountable Employee

Patrick White, Director of Industrial Strategy

Julia Goldsworthy, Director of Strategy

Report and content has been considered by

Programme Board - 21 December 2018Strategic Economic Development Board - 10 December 2018Innovation Board - ongoing input

Recommendation(s) for action or decision:

The WMCA Board is recommended to:

(1) Endorse the draft Local Industrial Strategy for further discussion and agreement with Government and to delegate to the Strategic Economic Development Board, in consultation with the Portfolio Lead for Economic Growth, the Mayor and the WMCA Chief Executive the agreement of any further amendments that arise in discussion with Government, where they are consistent with the overall strategy as currently drafted.

1.0 Purpose

1.1 This paper summarises progress and emerging content for the local industrial strategy. The full draft is attached.

1.2 The West Midlands Industrial Strategy will set out our strategic priorities for driving growth and productivity improvements as part of overall delivery of the 2016 SEP targets. It will set out, in headline terms, how we can achieve growth that is more inclusive and enables more of our communities to benefit.

2.0 Background

2.1 The Government’s 2017 Industrial Strategy White Paper set out that all local areas would have a local industrial strategy in place, agreed with Government, by March 2020. The West Midlands agreed to be a trailblazer area, working to develop the UK’s first local industrial strategy by March 2019. This is an important opportunity to set out the priorities that we think will enable us to continue very strong recent growth rates and to make the next stage of our success even more inclusive and accessible to all.

Over 2018 the SED Board has overseen the development of the West Midlands Local Industrial Strategy, with day to day work being led by the WMCA and 3 LEPs working collaboratively together.

The WMCA Board agreed the overall approach and emerging content for consultation at its September meeting. We are now seeking approval to move to finalising the document with Government, and to continue to develop it further to ensure it is as clear as possible about our distinctive strengths and opportunities.

Response to the consultation

An informal, non-statutory, consultation was run between early October and 16 November 2018 to gather views on emerging conclusions.

We also discussed the consultation document and emerging findings as part of pre-decision consideration by the WMCA Overview & Scrutiny Committee.

The consultation document posed ten questions, inviting comments and suggestions and we also launched an online survey for people to respond. Simultaneously LEPs, the WMCA and others worked with regional networks and business groups to gather views and used existing events to engage with a wide range of partners.

Overall, we received over 120 responses through direct emails, online and via the dedicated email address. Generally, the response was positive with lots of detailed suggestions:

In answering ‘have we identified the right strengths and competitive advantages in our sectors’, 91% of respondents answered yes (fully or partially).

86% of respondents thought that the challenges and opportunities facing the economy were accurately articulated.

91% thought that the strategic commitments were right or partially right, and a similar proportion thought these reflected the momentum which is underway and the opportunities ahead.

77% thought the actions would help their business or community grow and succeed.

83% thought the opportunities to benefit from Grand Challenges and make a major contribution to the UK’s response were right.

2.2. We have therefore prepared a draft strategy that keeps the overall approach whilst responding as far as possible to comments and suggestions for improvement. The most significant adjustments are:

Make inclusivity even more central. Be very clear about the West Midlands USPs and the distinctive contribution we have

to make, whilst avoiding “picking winners” and being clear about what the evidence tells us about future trends, existing strengths and barriers.

Expand the opportunities around future mobility, creativity, business, professional and financial services as the headline cross-sectoral opportunities based on the West Midlands economy, characteristics and strengths.

Provide more specificity on the role and importance of our supply chains. Improve recognition of place – cities, towns and rural areas - and the diversity of

outcomes across our geography. Each LEP has signed off on a series of case studies and examples.

We have also tested the evidence base, including with an independent panel, who made specific recommendations about productivity and being clear about the logic chains, but endorsed the overall approach and the way the strategy was structured based on the evidence. They were very clear, as has been Government in a series of informal discussions, that the emerging approach is both innovative and highly credible and reflects the West Midlands USPs and distinctiveness, which is a clear requirement for our LIS.

2.3 Outline of the Industrial Strategy

The approach we have taken is as follows:

Identifying four major national and global strategic opportunities where the West Midlands has the existing and emerging strengths and the supply chains needed to make a major contribution to the new markets being created by global trends:

o The UK centre for the future of mobility Includes digital and light rail, EV and CAV, aerospace, data handling, battery

manufacturing and the huge supply chain opportunities all this provides to our firms

Integrated with our investment in the West Midlands integrated transport system and connected through 5G.

£1bn opportunity just from batteries. Just 10% of UK CAV opportunity would yield £5bn - £10bn to West Midlands economy.

o Creative content, technologies and techniques Nationally important gaming, TV, Film, VR and AR firms and expertise But also crucially using creative skills and assets in businesses and universities

to design, develop and deploy new products and service. For example, new CAV vehicle design, component manufacturing across sectors, training new paramedics, surgeons and engineers using virtual reality and test beds.

o Business Services Large scale growth forecast in the sector and in the use of business services

skills across wider firms as we move increasingly to a more service-based economy

31% increase in jobs (125,000) and £12bn more GVA by 2030. Huge opportunity for more jobs for West Midlands residents – with good

progression

o Data driven health care Big opportunity to combine our strengths in translational medicine with real life

testing, in partnership with our diverse and growing population. NHS patient records here a huge opportunity, linked to 5G.

2.4 All are underpinned by and will contribute to the Commonwealth Games, City of Culture and our collective investments in infrastructure, housing and skills.

2.5 The strategy then shows the distinctive characteristics of our economy, both strengths and barriers, and how they link to the opportunities above. Strengths include our supply chain firms, diverse and young population, our creativity, connections and history of business and product innovation. This will include strong recent progress against some SEP targets, but also being clear that growth has been concentrated in a number of places, and too many of our communities have not benefited as much as they should. If we unlocked our full potential our economy would be £15.1bn larger and we would have higher average earnings with more people earning above the real living wage.

2.6 We then set out the actions that we are going to take, building on our opportunities and removing those barriers. These bring together actions that are already underway, planned and where we are seeking new things from Government. It will incorporate actions we have already agreed (for example as part of the regional skills plan, transport investment plan and housing and land delivery plan). The strategy will make a clear ask of Government that any post-EU growth funding, including that for skills and innovation, be targeted on West Midlands priorities and devolved to the region.

2.7 The strategy reflects the distinctiveness of the different places and communities of the West Midlands. Some of the actions in this strategy are region wide. Others are focussed on specific needs or opportunities. But all will contribute to our goals of more inclusive growth and higher productivity.

2.8 We will also include the main issues the region faces in relation to Brexit and the case for continuing to invest in us as a resilient and successful economy.

2.9 This strategy is based on the most up to date and detailed evidence possible. At the same time as the consultation has been running, the Black Country Consortium have been leading the process to develop the evidence base to provide concrete backing to the propositions and interventions set out in the WMIS.

3.0 Next steps

3.1 If the Board is content, we will move quickly as possible to secure Government approval, although this is clearly dependent on a Government process which we do not control and highly subject to Brexit taking up Ministerial time.

3.2 Working to these timelines, as a trailblazer area for the Local Industrial Strategy, we will be ready to be the first in the country to publish our strategy. Government have been clear that they want a shared process to finalise this strategy and we will continue to pursue these conversations. But it is also important that we undertake the WMCA sign off to ensure we have a strategy which reflects our shared ambition and which leaders are committed to.

3.3 Future funding for additional implementation of new and existing priorities will be part of our Spending Review approach with Government.

4.0 Financial implications

4.1 There are no direct financial implications arising from this paper. Future funding for implementation will be considered further as part of Spending Review discussions.

5.0 Legal implications

5.1 No legal implications at this stage.

6.0 Equalities implications

6.1 None

7.0 Inclusive Growth Implications

7.1 The inclusive growth implications are set out throughout the contents of this report.

8.0 Geographical Area of Report’s Implications

8.1 The report related to the West Midlands three-LEP geography.

9.0 Other implications

9.1 None

10.0 Schedule of background papers

10.1 The draft West Midlands Industrial Strategy

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Contents

1 Introduction ..................................................................................................................................................... 2

2 Metrics and Indicators ................................................................................................................................. 5

3 Strategic Opportunities ................................................................................................................................ 8

4 The West Midlands Economy ................................................................................................................. 17

5 Productivity and Output ........................................................................................................................... 21

6 Inclusive Growth ......................................................................................................................................... 24

7 Sectors ............................................................................................................................................................. 28

8 Actions to drive growth and productivity ......................................................................................... 32

Ideas ............................................................................................................................................................. 32

People – Skills and Employment ....................................................................................................... 37

Business Environment .......................................................................................................................... 45

Infrastructure ........................................................................................................................................... 48

9 Commitments and Implementation ..................................................................................................... 55

10 Annex 1 WMCA Performance Management Framework ............................................................ 58

2

1 Introduction

1.1 The West Midlands is in renaissance. A global force and major part of the UK economy,

generating £99bn of GVA or 5% of UK output.

1.2 We are growing fast, with output up 27% over the past 5 years. A record number of

people are in work and lowest number are out of work. Productivity is increasing too,

at twice the rate of the UK in 2017/18.

1.3 Our cities, towns and rural areas have long been centres of industrial innovation,

creativity and enterprise. A legacy that survived the industrial restructuring of the

1970s and 80s and is now the engine of our current and future success.

1.4 The West Midlands is large and diverse, consisting of three interlinked, but distinctive

economic areas. Our cities, many towns and important rural areas are home to

distinctive communities with very different characteristics. But all share a long history

of creative design, making and producing. Doing things differently and leading the way

is what defines us.

1.5 We’ve been supplying components and assembling vehicles from the first bikes to

today’s autonomous pods. We built the world’s first production line and now we create

virtual worlds for testing new products based on real data. We provide the real-life

testing needed to get new medicines from the lab to patients. Our firms provide

modern components and materials to global supply chains in a wide range of industries,

and our digital creative businesses create games played across the world.

1.6 Our universities and commercial research and development (R&D) centres are central

to the UK, developing the skills, products and processes it will need tomorrow, as well

as being major employers and core to the future of the towns and cities that host them.

1.7 In 2016 leaders from business, education, local government and a wide range of other

organisations came together to agree an ambitious but achievable economic strategy.

We have focussed on delivery and made good progress. The overall targets and metrics

set in 2016 will continue to drive our actions and investment and be used to measure

our overall progress.

1.8 But alongside celebrating our recent success, we need to remove the barriers that

remain. Performing at its full potential, our economy would be £15.1bn larger and we

would have higher average earnings and more people earning above the real living

wage. Recent growth has also been concentrated in a number of places and too many of

our communities have not benefited as much as they should. Developing a focussed

plan for inclusive growth is an important priority in this strategy.

1.9 Much has changed in the global, national and local economy since our 2016 strategy. In

developing this trailblazing local industrial strategy, we have taken the opportunity to

refresh priorities, take stock of the evidence and agree the actions that will have the

3

most impact in unlocking the barriers that lie between us and our long-term goals of

strong growth and improved productivity in a more inclusive economy. This is what

our local industrial strategy is designed to do:

• The strategy begins by identifying four major national and global strategic

opportunities, where the evidence shows that the West Midlands has both existing

strengths and the ability to make a major future contribution. They are cross sector

and not focussed on any one part of our region; all our firms and communities can

benefit in different ways. They also show how the West Midlands can make the

strongest contribution to the Grand Challenges set out in the Government’s national

Industrial Strategy.

• We then set out the distinctive characteristics of our economy with our USPs for

residents, businesses, investors and entrepreneurs. They show what makes us what

and who we are, the strengths that set us up well for the future and where there are

barriers to growth and productivity that we need to address.

• Then we set out the actions that we are going to take, building on our opportunities

and removing those barriers.

1.10 Throughout the strategy we reflect the distinctiveness of the different places and

communities of the West Midlands. Some of the actions in this strategy are region wide.

Others are focussed on specific needs or opportunities. But all will contribute to our

goals of more inclusive growth and higher productivity.

1.11 The 2022 Commonwealth Games and Coventry City of Culture are major opportunities

for local firms and communities and to showcase the region to investors and visitors

and leave a lasting legacy.

1.12 This strategy is based on the most up to date and detailed evidence possible. Over the

last three years, we have developed an extensive evidence base and undertaken a

number of expert independent commissions and studies into skills and productivity,

mental health, leadership and the availability of land for housing and employment. The

actions in this strategy are informed by that highly credible body of evidence.

1.13 It has been co-designed with the involvement of over 350 organisations, led by the

Combined Authority with the 3 Local Enterprise Partnerships, who have worked with

a wide range of organisations and sector groups and carried out public consultation

during the Autumn of 2018.

1.14 Our universities have played a major role in developing our evidence base and our

assessment of the strategic opportunities ahead. Ongoing work with businesses

themselves and industry groups to develop sector action plans has been crucial in

identifying actions and looking ahead. These emerging action plans will be essential in

how sectors and firms themselves implement our local industrial strategy, reflecting

the fact that our growth and productivity is driven by the region’s private sector.

4

1.15 Whilst focussed on the 3 LEP area, it also looks to our crucial economic, trading and

supply chain relationships with close neighbours (including non-constituent members

of the CA outside the 3 LEP area) and partners in the UK and globally.

1.16 It is not a strategy set in stone and is designed to continue to evolve as the economy

changes. As we develop it further, we will continue to involve and engage with the

communities, businesses and sector groups across West Midlands.

Ian Ward Andy Street Jonathan Browning

5

2 Metrics and Indicators

2.1 In 2016 the West Midlands agreed a comprehensive approach to monitoring the overall

performance of our economy across a wide range of indicators. This is set out in Figure

1 below. The targets we have set against these indicators are set out at Annex 1,

together with the most recent progress against them which we publish in our annual

State of the Region report.

2.2 This local industrial strategy does not set new targets, we have concluded that the long

metrics we set in 2016 are still appropriate. They continue to drive our investment

programme and are delivered through a number of other regional and local delivery

mechanisms, including individual LEP investment plans, the Housing and Land Delivery

Plan, Regional Skills Plan and Transport for West Midlands (TfWM) Movement for

Growth strategy.

2.3 The local industrial strategy is focussed on those actions which will drive future output

and productivity growth, whilst improving inclusion and opportunities for all our

residents. It integrates existing plans, such as those above, updates some actions and

proposes new interventions where the evidence suggests that this is appropriate. It

does not set a new set of targets.

Figure 1 - Tracking the West Midlands Economy

2.4 Figure 2 shows how this approach is reflected in the structure of the local industrial

strategy. Actions are targeted at specific foundations of productivity, based on what

the evidence shows us about our economy and sector specific strengths and barriers,

and where the market alone will not deliver the outcome required. These actions will

6

support the whole West Midlands to take advantage of the strategic opportunities

ahead.

7

Figure 2 West Midlands Local Industrial Strategy

8

3 Strategic Opportunities

3.1 The future success of the West Midlands lies in our ability continue to influence and

adapt to long term global and national trends. These include:

• Large scale urbanisation and population growth.

• Rapid technological change, advances in the creation and use of data, and increasing

automation and artificial intelligence.

• Longer life expectancy, an ageing population with increasingly complex needs and

later pension ages.

• Increasing awareness of local and global environmental impacts and the transition to

a low carbon, resource efficient economy.

• The long-term trend towards a more service-based economy, for example in mobility.

• Growing concern about communities and people that have been left behind by recent

growth.

3.2 All these factors, and others, create demand for new products and services, presenting

opportunities for growth. They are also opportunities to drive productivity, as firms

and individuals change the way they work and develop new skills and techniques to

succeed. These changes affect all areas of our economy, crucially, the existing supply

chains that underpin the region’s success.

3.3 The opportunity and challenge for the West Midlands is to use our existing strengths

and emerging expertise to ensure clarity on our distinctive opportunities, and to ensure

that not only our firms and communities benefit, but that we do so in a way that plays

a leading role in the UK’s response to global trends and future economic success. The

West Midlands has the scale and size - in terms of geography and population - and the

level of committed investments to enable the development of test-markets at scale.

These attributes enable us to address the Grand Challenges that Government has set

out and drive UK economic growth.

3.4 We have been careful to ensure that these opportunities are specific to the West

Midlands and reflect where our USPs link with global trends. We have worked with all

the West Midlands universities, a wide range of sector groups and trade bodies, and

market experts to understand what global trends and new markets mean for the

different sectors and places of the West Midlands.

3.5 The evidence shows there are four distinctive strategic opportunities where we can

play a leading role in the next generation of industry, products and services, improving

the productivity and inclusivity of our economy as we do so. Successfully exploiting

these will involve a wide range of opportunities for all our firms, from the region’s

9

existing large firms and anchor institutions through to SMEs and firms of all sizes. Our

SME and micro business base in particularly will see huge opportunities from the

related new markets that are emerging.

3.6 The distribution of our supply chains, universities, colleges and existing and future

employment land means that success in these areas will benefit all our cities, towns and

rural communities, plus other areas across the UK, with the potential for a much more

inclusive future.

3.7 Delivering a greater volume of good quality employment land is critical to the success

of our strategic opportunities, particularly through greater utilisation of brownfield

land. Through the National Brownfield Institute in Wolverhampton the West Midlands

will be a nationally and internationally significant centre of expertise, driving an

increase in potential land availability locally, such as Phoenix 10 in Walsall and i54 in

Wolverhampton. Successful conversion and extension of these kinds of sites will also

underpin the strategic opportunities.

1. Smart Mobility

The West Midlands is the centre of transport innovation in the UK, leading the smart, low carbon movement of people and goods

3.8 The West Midlands is the recognised centre of transport and mobility innovation in the

UK and has some of strongest clustering of automotive technology activity in the world.

Our ability to be a long-term leader in the production of new transport systems is

rooted in our successful history of leading the specialist design and manufacturing of

vehicles from bicycles through to automotive, precision aerospace components and

autonomous pods. We are widely recognised as the existing home of automotive and

the mobility industry of the future, in a global cluster that includes cutting edge

research and development, globally competitive supply chain firms and established and

new OEMs. This is a cross sectoral opportunity, enabling and requiring collaborations

between gamers, designers, digital and physical component makers, data and legal

experts, circular economy and energy firms amongst many.

3.9 We are the UK’s platform for creating, developing, testing and building global and

national solutions to the future of mobility and associated supply chains, including large

scale battery manufacture and the move to electric vehicle (EV) powertrains across the

full range of transport modes. A plethora of firms from the foundation industries of

metals and materials underpin our manufacturing prowess, reflecting the robustness

and inter-connectedness of the region’s supply chains.

3.10 The West Midlands is at the forefront of the research, development and production of

Connected and Autonomous Vehicles (CAV), Electric Vehicles and large-scale battery

manufacture. We will soon be home to the UK Battery Industrialisation Centre (a key

component of the UK Industrial Strategy and focussed on enabling industry to scale up

10

and commercialise advanced technologies central to the development and manufacture

of batteries), and we have an unparalleled range of innovation assets (including Horiba

MIRA’s research and testing centre & technology park, WMG, Manufacturing

Technology Centre, National Transport Design Centre, and the Centre of Excellence for

Digital Systems for Rail); OEM’s and tier 1 manufacturers undertaking R&D and

production in this field (including JLR, BMW, Bosch, Brose, Denso, Geeley London Taxi

Company, Siemens, Telent and Volvo); and smaller but leading disruptive entrants and

supply chain companies (including Detriot Electric, RDM and Westfield).

3.11 Many of our supply chain firms are developing, or have already developed, the expertise

needed to succeed in the manufacture of battery, CAV and EV powertrain components,

including Westfield in Dudley, ZF Lemforder in Darlaston and Teepee Electrical in

Bloxwich (Walsall). Our aim is to take a unified and balanced approach to how our

economy and firms manage the transition from the majority of today’s vehicles to EV

and CAV and the opportunities this creates. For example, ensuring a successful

transition will involve ensuring supply chain companies have the right necessary wider

business environment so that they can successfully contribute to the delivery of smart

mobility in the region.

3.12 Our ambition is to continue this success as the centre of the transport manufacturing in

the UK, and to reinforce our strengths in the production of EV and connected and

autonomous vehicles related products and components. The more immediate

opportunity of EVs will require large-scale battery manufacture, the rapid adoption of

EV locally, and the roll out of the necessary local charging and energy transmission

systems. Successfully managing the transition from combustion engine production to

EV production will be crucial to ensure that the West Midlands remains at the forefront

of the automotive industry.

3.13 We are working with Government to maximise the impact of our shared strategic

programme of investment, as the UK’s first Future Mobility Zone, to pilot and prove the

future of smart mobility solutions. We are home to 5 live test beds for CAV, and a range

of specialist testing facilities (including the new TIC-IT high speed CAV test track at

Horiba MIRA). Our strengths go well beyond the automotive sector, and include digital

and ultra-light rail, logistics, aerospace and commercial vehicles. We are building the

transport system of the future through a significant programme of transport

investment, building an integrated, clean, multi modal system linked to High Speed 2

(HS2). This will directly address productivity challenges by connecting people to new

job opportunities and skills provision, improving access to healthcare and green space

and will improve air quality. It will also be integrated with our 5G network to drive a

new traveller-centric system and approach.

3.14 With significant planned investment of over the next ten years, the opportunity to apply

our innovation and manufacturing expertise locally to West Midlands supply chain

firms is vast. We will use the 2022 Commonwealth Games and 2021 Coventry UK City

of Culture to showcase new approaches to mobility and visitor travel information

across all modes of transport, including autonomous services, smart transport

11

networks and integrated control and data management. Firms of all sizes in the West

Midlands and from across sectors will be involved in this success.

3.15 The implications for our region could be significant. CAV alone is worth between £50-

£100bn to the UK economy. A single Gigafactory scale battery manufacture would

generate at least £1bn locally, in addition to an integrated transport network and

arrival of HS2, which will add £4bn to the West Midland’s economy, driving major

centres of growth such as UK Central. We will connect these opportunities to our

supply chains, allowing us to boost SME growth and productivity.

3.16 Our 5G infrastructure will enable a totally new approach to real time data and user

management across the whole transport system, including integration with CAV design,

testing and operation. Collaboration with other 5G testbeds, including Worcester

Manufacturing and Midlands Engine 5G project, will deliver productivity

improvements for the wider supply chain.

3.17 We are putting in place the capability needed to use large volumes of near to real-time

data sourced from intelligent roads and vehicles plus spatial and environmental data to

manage new transport systems operating on a complex network. For example, the Open

Data Institute at Warwick Manufacturing Group will provide the open access analysis

and research facilities needed to develop future solutions to the business, legal, ethical

and regulatory challenges and opportunities created by substantial new, real time,

personal data. We will also establish data and mobility technology scholarships for the

analysis of mobility data and application of disruptive technology into the

manufacturing supply chain and logistics.

3.18 Innovation in connected mobility will underpin a new approach to distributed,

connected factories and supply chains, with significant gains for the wider UK economy

and local supply chains across our region and wider Midlands Engine area. For example,

the evidence shows that £1 of productivity gains in the West Midlands automotive

industry is worth up to £2.2 to the UK economy through supply chain benefits.

2. Data driven Health and Life Sciences

Partnering with patients and business to improve health and wellbeing

3.19 The opportunity we have is to make the West Midlands a global centre for the

innovation, translation and real-world evaluation of new diagnostics, devices and

healthcare technologies (including artificial intelligence). Building on the successful

Institute of Translational Medicine and enabled through the best real-world test bed in

Europe, based on a partnership with our large, stable and diverse population.

3.20 AI and large data techniques are driving new approaches to healthcare, in medicines,

devices and services. The next phase of disruptive innovation in the life sciences will be

driven by big data, and the UK’s response to it, at a time when global state actors and

companies are innovating in ways that will dramatically affect the relationship between

12

individuals and their health and biometric data. Increasing developments in digital

solutions are driving huge new market opportunities around remote health care and

assisted living and enabling greater cross-overs between our strong digital creative

sector and health & life sciences.

3.21 Recognising this shift to working across disciplines, sectors and institutional

boundaries, over the past 5 years the West Midlands has transformed our contribution

to health and life sciences, centred around the University/NHS strategic partnership

Birmingham Health Partners, and involving new facilities and expertise across our six

universities. We have aligned academic, NHS and industry capabilities across the West

Midlands based on shared mission rather than sector boundaries to deliver an offer

built on our nationally recognised strengths in genomics medicine and diagnostics,

clinical trials, medical technologies evaluation and healthcare data informatics and

systems, and digitisation of health care services. These strengths are underpinned by

significant national, competitively-won investments.

3.22 Our expertise and ability to work with patient data in an inclusive, collaborative way is

a major UK and West Midlands strength. We can provide the translational environment

to develop the testing, evaluation, validation and application of new technologies (e.g.

AI or diagnostic) from other regional and UK clusters.

3.23 Building on these established strengths and strong links to the wider Midlands cluster

will help deliver the key elements of the Government’s Life Sciences Industrial Strategy

and address the mission, announced as part of the AI and Data Grand Challenge, “to

transform the prevention, early diagnosis and treatment of diseases like cancer,

diabetes, heart disease and dementia by 2030.”

3.24 Crucially, our offer and expertise are complementary and distinctive to other UK

clusters in providing:

• A co-located translational environment and access to a diverse population at scale.

• The ability to accelerate translation through strong partnerships between

universities, the NHS and firms.

• The ability to offer real-world and diverse environment testing - ensuring wider

relevance and ability to scale nationally and internationally.

3.25 National and global firms see the commercial opportunity here. We have a growing

cluster of both large and small firms and an associated supply chain, raising at least

£35m of investment in the last 12 months. We have also seen investment of over £150m

in the Birmingham healthcare campus and will continue to invest in the business

support and networks needed to drive cluster development.

3.26 Our approach to supporting innovation within the health and life sciences industry will

be anchored in partnership with the NHS and thereby ensure the potential to translate

directly into better health outcomes for our citizens across the region. This opportunity

will also provide new technical careers in local health care and more personally

13

targeted care working with individuals, digitally enabled care reducing the burden on

carers, improving health outcomes and providing the healthcare jobs of the future.

3. Modern services and business, professional and

financial services

3.27 The global trend towards services is a significant opportunity for the West Midlands.

Existing firms will need to adapt to and adopt new technology, new processes, products

and services. The innovative use of business, finance and professional service skills is

increasingly important for the long-term growth and success of firms in all sectors. This

creates growing demand for business and professional services and skills locally and a

growing national and global market for these skills and the firms that provide relevant

services. Talented people with the right experience, networks and ability to innovate in

these areas are in strong demand across all parts of our economy and supply chains.

These trends will drive significant global growth, innovation and disruption to

professional services in the decades ahead.

3.28 Total business, professional and financial services (BPFS) GVA is forecast to double

between 2015-2030, with growth forecast across all parts of the sector. Employment is

expected to grow by 31% over the same period. The sector currently employs just over

400,000 people and contributes over £24bn of GVA to the West Midlands economy.

3.29 We are the only place with a ‘full service offering’ outside London; with the exception

of high-end financial management (related to the stock market and investment) all

services are available. Most nationally significant firms have a full-service team

operating locally. Companies cite the availability and loyalty of skilled talent, the choice

of locations and office space and attraction as a place to retain talent, as strong drivers

of future growth.

3.30 The sector has a highly distributed global client base and the West Midlands has a

different distribution of occupations compared with the national picture, with higher

skilled occupations which reflect the technical and professional, rather than back office,

nature of the West Midlands cluster. World class business schools like Warwick, Aston

and Birmingham mean we have more business students here than any location outside

London and we will continue to develop and foster innovative partnerships and links

between firms and education institutions, including opening opportunities to

communities that may not otherwise see the sector as accessible and ensuring the

availability of the technical skills that continue to be in high demand.

3.31 Changes for which the West Midlands is well placed to take advantage include AI,

automation, cyber security and machine learning. With small technology firms,

regionally embedded larger firms and expertise in our universities we are a test bed for

business innovation to access and embed new applications and techniques, helping

core business services firms and wider sectors deliver next generation services locally,

nationally and globally.

14

3.32 The West Midlands is already well connected, but HS2, and further expansion of

Birmingham airport, will drive our success further as a high value business and

professional services location and attractor of talent. Rapid expansion of different types

of high-quality housing, high grade employment spaces and improved connectivity

within the region will do the same. Investor interest is high, and we will continue to

land significant additional investment.

4. Creative content, techniques and technologies

3.33 The West Midlands has a long history of creative business success, from the earliest

development of new techniques in industrial design and processing, to 90,000 creative

jobs today. A major feature of our economy is the extent to which our creative

UK Central – Solihull

UK Central Solihull reflects the huge potential of the West Midlands and the integrated approach to delivery that makes it achievable.

Solihull is an area of strong growth and high demand that is a net contributor to the Exchequer. UK Central brings together Solihull’s world class business, transport and leisure assets to deliver a unique proposition in a high value environment. At its core is the Hub, which is already home to Birmingham Airport, the National Exhibition Centre (NEC), Jaguar Land Rover and Birmingham Business Park. The international transport connectivity and existing growth drivers will be bolstered by the arrival of HS2 at Arden Cross, the redevelopment of Birmingham International Station and major housing and commercial growth over the next few years.

The scale of opportunity is unprecedented in the region: 775,000 m2 of new commercial and mixed use floor space; up to 5,000 new homes, up to 77,500 new jobs delivering up to £4.1bn additional GVA each year. Investment in the Hub across a range of programmes interact and is coming together to deliver new energy provision, multi modal transport innovation and large scale business growth opportunities - including in EV manufacture and new, digital, business services firms. New communities are planned based on a modern interpretation of garden town principles.

15

communities are engaged in both the core creative industries, and in using creative and

design skills and techniques in the transformation of products, processes and services

as part of industry 4.0 and a wide range of future global markets. In Greater

Birmingham and Solihull alone, nearly 60% of design jobs are outside core creative

industries. Furthermore, while the area in and around Leamington is dubbed “Silicon

Spa” for the nationally significant concentration of gaming companies, there are

increasing cross-overs to other sectors, and wider digital technology sector in the area

are developing exciting collaborations in new market areas. All the following examples

are happening today in the West Midlands; they are a very distinctive hallmark of our

economy:

• Design-led thinking originating in the gaming industry is combined with virtual

reality (VR) and augmented reality (AR) to develop, prototype and test new vehicles

across automotive, aerospace, rail and last mile logistics as well as the wider digital

manufacturing sector.

• Creative techniques for visualising and manipulating large and complex data sets are

driving new approaches to healthcare, personal finance and insurance services,

mobility, tourism and culture, and retail environments.

• VR and superfast connectivity are being used to train the next generation of

paramedics, engineers and surgeons in environments that are as close to real life as

possible.

• Modular construction of high quality, low energy homes begins with design-led

solutions to components and build. Modular construction is estimated to be worth

£2-3bn per year in the UK, with modular build growing by 25% per year.

• Design-led production of new components and diversification into new markets,

often with cross-sector impacts.

• Increasing digitisation of services, and innovation within culture and media to

develop new ways of engaging “audiences of the future”.

3.34 In our core creative industries, we have strengths in next generation creative and

commercial content creation and as a production centre for higher budget content.

Demand is driving investment in new high value TV and film production capacity and a

proposed Media Campus at the NEC. Recent and projected economic and population

growth is driving increased demand from consumers for creative experiences, such as

theatre, performance and live music, which are stimulating the market for the region’s

cultural offer.

3.35 The Commonwealth Games and Coventry City of Culture will provide significant

opportunities to develop and showcase new, creative and digitally led, approaches to

resident and visitor services and experiences. Our 5G connectivity will unlock new

markets and platforms for content, information and services.

3.36 The distributed factory of the future will be constructed by designers, data analysis and

visualisation specialists, powered by 5G connectivity and involve the rapid design, build

16

and deployment of virtual and physical components. These approaches will be

developed and adopted in the West Midlands, as our innovative manufacturing and

transport supply chains evolve for the future.

3.37 The West Midlands has the skills, firms, innovative supply chains and assets needed to

take advantage of global growth in this creative future for content, techniques and

technologies across all our sectors and sub sectors. With a core sector generating over

£4bn of GVA through 10,000 firms, 10% of the UK games industry based in Silicon Spa,

and universities including Birmingham City and Coventry that are nationally leading in

providing graduate and post graduate skills to a wide range of creative disciplines. We

have strong collaborations, clear sector specialisms, and a diverse creative ecosystem.

3.38 We have a creative economy that is far more than just our strengths in creative

industries. The evidence shows that Birmingham and Solihull alone have the potential

to add nearly 4,000 new creative enterprises and 30,000 new related jobs1 with

the opportunity to scale this across the West Midlands.

1 Creative Economy Mapping Study for GBSLEP https://gbslep.co.uk/resources/reports/creative-economy-mapping-study

17

4 The West Midlands Economy

4.1 This section summarises the distinctive characteristics of our economy – strengths that

will help us meet the strategic opportunities we have identified and the barriers that

remain. More detail can be found in the evidence pack and in the sections on each

foundation of productivity.

4.2 The West Midlands has always been the productive heart of Britain. We are home to

innovators, engineers, creators and designers; doers, learners and makers who do

things differently and lead the way. Over the last decade, the West Midlands economy

has experienced a renaissance – our £99bn economy has grown by 27% in the last five

years and over the last 12 months productivity growth has been twice the national rate.

A region full of youth, diversity and opportunity

4.3 We have the youngest population in the country outside of London, with more than one

in five people aged under 16 and 39.7% under the age of 302. Our population is highly

diverse. For many decades people from around the world have come to call the West

Midlands home and our communities and businesses are richer for this diversity of

faith and culture. We are place of many perspectives, communities and beliefs, each

with an important contribution to make to our business, economic and social life. This

also gives us powerful personal and businesses connections to the rest of the world.

And people who grow up here want to stay, more than 70% of graduates from the West

Midlands return here. We predict a population increase of half a million in the next 20

years. This is a region full of potential and opportunity.

International and outward looking

4.4 We are open, welcoming and ready for business. Investor sentiment is strong, and the

West Midlands is recognised as an excellent place to do business. Our business centres

are being transformed through the development of 2 million square feet of prime office

space.

4.5 We are the fastest-growing UK region for goods exports and experienced 27% growth

between 2015 and 2017. Outside London and the South East, we export the most by

value, over £33bn in 2017. Not only this, we had the greatest number of new jobs from

FDI projects outside London last year. Since 2011, the number of FDI projects has

tripled. There is significant capacity and potential for growth here. Our universities

have global presence and draw talented, highly skilled people at all stages of their

academic and business careers.

Continuing a history of creativity, innovation, design and making

2 3 LEP geography

18

4.6 We have a long history of creativity, innovation, design and making. The West Midlands

has been at the forefront of change and innovation throughout successive industrial

revolutions, driving technological development for the whole of the UK. We are the

home of the Lunar Society and the region that gave birth to the ‘city of a thousand

trades’. People, institutions and cities have put theory into practice, translated ideas

into action, solved problems and created great works that have made their mark across

the world.

4.7 This heritage and continuing strength in bringing creativity to the design of products

and processes is why the West Midlands is a centre of excellence and home to some of

the world’s most famous brands such as Land Rover, JCB, Cadbury’s and AGA. Our

cultural creativity has been recognised by Coventry being awarded the UK City of

Culture in 2021 and our people, businesses and universities continue to enhance that

reputation through their innovation, creativity and endeavour.

With globally competitive and adaptable supply chains

4.8 Our economy is distinctive for its deep network of supply chain firms operating across

a range of sectors, including automotive, aerospace and medical technology and playing

a crucial role in the value chains of goods and services traded across the world. Many

of these firms and the people that work in them have been highly successful in adapting

to past developments in supply chain requirements and are well placed to continue to

do so. Indeed, we have one of the world’s greatest concentrations of automotive

technology activity, driving the future of mobility.

4.9 Companies within the West Midlands are engaged in a wide range of supply chain

activities from the sourcing of inputs, including raw materials, production, distribution

and delivery of goods and services to downstream, consumer facing markets. Our

supply chain firms are critical to growth and productivity - integral to the core activity

of our sectors and through their potential to diffuse innovation into the wider economy.

4.10 The long-standing pattern of engineering and manufacturing supply chains is deeply

connected into our university innovation and research assets. The resultant pattern of

development is a polycentric supply chain economy with distinctive local but linked

specialisms. Our core urban centres each have their own economic linkages and travel

to work patterns. Figure 3 demonstrates the spatial distribution of activity in the

automotive supply chain as an illustrative example, showing activity across all areas of

the West Midlands, with a significant concentration in the Black Country.

19

Figure 3 Automotive supply chain jobs and businesses

Source: ONS Business Register and Employment Survey (2016) and BvD Fame (2018)

Located at the heart of the nation

4.11 We are a region built on social and commercial connections and collaboration. No other

region has more than 90% of the UK’s market within a four-hour drive. When HS2

arrives into UK Central and Birmingham Curzon Street, with journey times of just 38

minutes to London, it will bring the capital closer to the West Midlands than it is to

Cambridge. And as the hub of the HS2 network, connections to the northern cities of

Manchester (40mins) and Leeds (1 hour) will be less than half current times. We have

one of the UK’s fastest growing airports, carrying 13 million passengers a year on 50

airlines to 143 destinations. Birmingham Airport recently announced the UK’s first

direct flights between Birmingham and Amritsar and £500m of investment.

20

4.12 The West Midlands will also be the site of the UK’s first 5G rollout. The potential to

utilise early adoption of this technology across our industries and services is immense

and the West Midlands will trial implementation and application to communities and

industry for the UK.

Strong leadership and proven delivery

4.13 The West Midlands Mayor and Combined Authority leaders are committed to growth

that delivers a tangible change in people’s everyday lives. Investments over the course

of the coming decade to drive productivity will be integrated in communities, putting

people at the centre of what we are trying to achieve.

• 215,000 new homes by 2031, providing high quality places to live, with real choice.

• £69m to support development of new skills provided in ways that meet the needs of

how people live and work.

• Highest increase in workforce jobs outside London and rapid reductions in the

proportion of working age population with no qualifications.

• More than £50m to create the UK’s first multi-city 5G test bed across Birmingham,

Wolverhampton and Coventry.

• Home to the new UK Battery Industrialisation Centre

• Commonwealth Games 2022 – Athletes Village, investments to Alexander Stadium

and facilities across the region like the Olympic swimming pool in Sandwell.

• City of Culture 2021 – unlocking investments and productivity improvements in arts,

culture, visitor economy and a Year of Wellbeing and a 10-year Cultural Strategy.

• Six new suburban rail stations and over 31km of new track will provide 20,000 new

seats.

• HS2 –with a £4.4bn HS2 Growth Strategy, including the Curzon Masterplan and 20

transport schemes to fully connect HS2 stations to local transport networks and

communities.

• A new Metro system, including East-West Metro with extensions to Dudley/Brierley

Hill and through East Birmingham to North Solihull and the HS2 Interchange station.

• £15bn investment in distributed energy infrastructure to 2030.

• £10bn opportunities in identified investor-ready sites and a strategic programme to

identify and bring forward employment land.

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5 Productivity and Output

5.1 Low productivity growth is not unique to the West Midlands and the Government

recognises this as a UK-wide challenge in the Industrial Strategy, but the West Midlands

has some distinctive challenges alongside distinctive strengths.

5.2 GVA per employee varies significantly across sectors in the WMCA, with an average

figure of £42,897. This is below the national average of £47,783. At the individual level,

amongst all residents in the West Midlands, GVA per head is £4,886 lower than the UK

average. The productivity gap is significant and is reflected across most of our broad

sectors. Performing at full potential, our economy would be £15.1bn larger.3 This

gap is driven by three structural issues in our economy.

Insufficient skills levels Fewer residents in

employment

An economy lacking

dynamism

The proportion of the

WMCA population with

NVQ4+ is 31.1% compared

to the UK, at 38.4%.

Compared to the UK’s 74.7%

employment rate, the West

Midlands has 71% of people in

work.

There are 398 businesses per

10,000 population in the

region. This compares to 443

per 10,000 as the UK

average.

This amounts to 184,867

fewer people with this

higher-level qualification in

the WMCA compared to the

UK on the whole.

There are 95,422 fewer people

in work here than the UK

average

The result is 18,393 fewer

businesses in the WMCA vs.

the UK average.

5.3 These structural challenges cut across the foundations of productivity and manifest

differently across in different places as well as sectors. We explore these further in the

subsequent chapters. However, we know we have the potential to significantly grow

our productivity levels. The Coventry & Warwickshire LEP area within the WMCA has

seen the fastest economic growth of all LEP areas in the country since the end of the

3 The output gap figure has been updated to reflect 2017 GVA per head data

£3bn

Insufficient skills levels

£5.2bn

Fewer residents in employment

£6.9bn

Weaker performance in

competition, investment, enterprise & innovation

22

recession, including the greatest improvement in productivity levels with GVA per job

filled growing by over 28% since 2009.

Firm level productivity drives our productivity challenge

Regional productivity is influenced by both industrial mix, because different industries have

different average levels of productivity, and by the productivity of firms within individual

industries and the extent to which they outperform other regions.

The West Midlands’ industry composition index is the highest of all English regions. Meanwhile

our firm productivity index is 16% below the Great British average. This suggests that our lower

overall productivity is due to relatively lower firm productivity within industries rather than

our industrial structure.

If we were to keep the West Midlands’ industry structure but applied average UK productivity

to the firms within each industry, regional productivity would be higher than the Great Britain

average.

Like most of the UK, 99% of the West Midlands business structure is SMEs, but a higher

percentage of these are “lifestyle businesses”. These firms are set up primarily to maintain a

level of income for the owner and generally lack growth ambition. This affects productivity and

dynamism.

GVA per employee varies significantly across sectors in the West Midlands and the average GVA

per employee is below the national average. Four sectors exceed the regional benchmark on the

GVA per employee measure of productivity (£42,897): Low Carbon and Environmental

Technologies is by far the most productive sector (£134,638 GVA per employee), followed by

Digital and Creative (£65,151), Business, Professional & Financial Services (BPFS) (£60,212)

and Advanced Manufacturing and Engineering (£58,036). The other six broad sectors have

productivity below the WMCA average.4

The evidence tells us about the nature of the productivity challenge - this is an issue of firm level

productivity within and across industries. Actions to address the challenges firms face in

pursuit of growth and productivity gains are explored both within the context of specific

industries in section 7 and common elements of the supply side: ideas, people, business

environment and infrastructure in section 8.

5.4 Aspects of the productivity challenge are also spatially more concentrated in some

parts of the West Midlands. Variations in GVA per hour are shown below:

4 Sector data presented here is based on the 10 original WMCA sectors used in the 2016 SEP.

23

Figure 4 GVA per hour worked (£)

Source: ONS sub regional productivity (2018)

5.5 This spatial variance is reflected in patterns of employment and skills (explored in more

detail in the people chapter. Overall, 12 West Midlands’ local authorities have a higher

employment rate than the UK average (74.7%) with the highest rate in North

Warwickshire (85.4%). We see much lower employment rates in other areas: Sandwell

(64.3%), Birmingham (63.6%) and Wolverhampton (65.8%) in particular.

5.6 In the Black Country, 15.6% of people have no qualifications, almost double the national

rate of 8%. The median full-time weekly wage for Black Country residents is £499,

compared to £545 in GBS LEP and £589 in Coventry and Warwickshire.

5.7 We also see stubbornly poor performance on, for example, healthy life expectancy and

childhood obesity, with growing problems of housing affordability. We have low levels

of access to green space, local hotspots of poor air quality, 12% of our households in

fuel poverty, and high levels of carbon emissions.

5.8 We explore these issues in more detail in the sections on each of the foundations of

productivity below, and in the supporting evidence reports. In summary the major

issues for the West Midlands are:

• Recent growth has not been felt by all and too many miss out, with significant

variations between those areas where growth has been concentrated and skills and

earning power is highest, and those where it has not. Unlocking the potential of these

communities is core to improving lives and reducing the output gap.

• The strategic opportunities we have will drive the success of sectors that already

have higher than average productivity and those where our productivity is lower

than it could be, such as construction, retail and health. Securing the adoption of

new techniques and technologies, often across sectoral boundaries, is the other

major part of solving the productivity puzzle here.

0 5 10 15 20 25 30 35

Black Country LEP

Coventry and Warwickshire LEP

Greater Birmingham and Solihull LEP

West Midlands Combined Authority

United Kingdom

£ per hour

24

• We have the research and innovation capacity and the creative, young population

needed to make this change, but have more to do to drive business demand for new

skills, techniques and technologies.

Investing in resilience

5.9 Brexit will create a change in our relationships and interactions at a regional, national

and international level. But it does not mean that our outward looking perspective and

readiness to cooperate with neighbours will change too. The region’s success is built on

migration and immigration. Knowledge exchange and progress go hand in hand and

Leaders across the West Midlands are clear that leaving the EU does not correlate with

a withdrawal from open collaboration with cities and regions across Europe or the rest

of the world.

5.10 The West Midlands is still highly recognised both nationally and globally as a region

open to new ideas and new working practices. We have a strong track record of

bringing in major investment from European and other global partners which has

brought prosperity, growth and employment to the region and UK as a whole. This will

not change. Rather the West Midlands has the opportunity to be at the forefront of all

that is successful about the future UK.

5.11 Businesses have concerns in a number of areas. Smooth trading, particularly for our

advanced manufacturing base, is significant. There are implications for supply chains

and just-in-time impacts. Similarly, there are particular vulnerabilities around the

recruitment and retention of skilled workers - 1 in 10 nurses are EU nationals and the

need to maintain access to technical skills is important for many of our industries.

5.12 Funding is another aspect of change. The regional economy has benefitted from £566m

in ESIF funding (2014-2020). The UK Shared Prosperity Fund (UKSPF) must be

constructed and resourced so it funds our priorities around growth, productivity and

inclusion5. We expect parity between the previously separate EU and domestic local

growth funding and the UKSPF. The fund must be designed in a way which allows us to

invest this funding locally to achieve the shared ambitions in the WMIS and to address

the thematic and spatial barriers to improved productivity and inclusion.

6 Inclusive Growth

6.1 Growth and the benefits of growth are unevenly distributed, with pockets of

deprivation, low employment and a lack of access to opportunities. International

evidence shows that the concentration of creative and highly skilled people and firms

that drive growth in our urban areas can also further entrench inequalities, particularly

in suburban and rural areas close to centres of growth.

5 Further reading – https://www.birmingham.gov.uk/downloads/file/11144/brexit_impact_analysis_summary

25

6.2 There is a long-term opportunity to connect more of our people with our economic

opportunities. This will boost our productivity and benefit the UK economy. There is

strong evidence that we could be more productive overall and that firms face

recruitment challenges for entry level and higher skilled roles, as well as changing skills

needs. The priority for us now is to develop a West Midlands Inclusive Growth

roadmap / plan which pulls out the specific implications and targeted activities and

next steps for both the local industrial strategy and wider West Midlands workstreams.

6.3 Devolution, combined with an economy in renaissance, give us a unique opportunity to

make inclusive growth happen here, now. Local powers and flexibility mean that

interventions can be designed, tested and implemented based on the needs of local

people, businesses and places (including recognising the specific and different

challenges facing urban and rural areas of our geography). The commitments and

actions at the heart of this strategy set out what we believe a more inclusive West

Midlands can be.

6.4 Inclusive growth underpins all the actions in the strategy. For us this means that we

want to ensure that all our residents and communities can touch, taste and feel the

benefits of rising prosperity. And we know that we will be most successful if we benefit

from the creativity, talent and ideas in all our communities. Our strong local

partnership, together with the new powers and influence of the Mayoral Combined

Authority, gives us the chance to drive progress over the long term, make the case to

Government and make things change.

6.5 Our opportunity is to use our Industrial Strategy and the potential of a young and

growing population to act boldly where we have the levers to do so. We will seek to

pilot new initiatives designed to deliver more inclusive growth. These will build on our

existing projects and pilots such as Thrive West Midlands, which will improve

awareness of workplace mental health.

6.6 Raising the living standards of all our residents and addressing the low productivity,

low pay cycle that many of our residents experience will require an integrated response

across multi policy areas. The West Midlands has a unique opportunity to do things

differently and we will implement a West Midlands approach in piloting, experimenting

and evaluating what works here.

6.7 We have launched the Inclusive Growth Unit to blend analysis, policy advice and

practical action. The unit will support the development of the roadmap and promote

inclusive growth outcomes with our Industrial Strategy and Public Service Reform

programme across all activity. Its work will develop over the next year. We aim to make

this unit the leading example of devolved areas working towards inclusive growth

goals.

6.8 We have identified priority issues on which to develop and test new approaches:

• Low pay sectors such as social care, looking at labour supply and demand, locally

adapted and targeted training and skills, meeting local needs with local innovation

26

and creating/facilitating organisations to fill gaps or create linkages around the

sector.

• In work progression, increasing the support available to people to access in-work

progression opportunities, particularly for employers and residents working in

tourism, retail and prioritising historically lower paying sectors, where technological

change will open up new, higher skilled roles. This will require focus through business

support and skills provision.

• Commissioning and procurement, with an emphasis on maximising local value,

local supply chains, local skills development and local ownership in infrastructure

projects. This includes HS2, City of Culture and Commonwealth Games related

procurement.

• Diversity, the Combined Authority can lead by example to promote diversity by

implementing the Leadership Commission’s recommendations of organisational

culture change policies and policies to support individuals in the Combined Authority

and wider public sector.

• Inclusive Growth Corridors and town centres, implementing place-based

responses to integrate investment in specific sites and growth corridors bringing

together transport, housing, skills, Public Service Reform and wellbeing investment

to drive long-term change.

• Bespoke solutions for individuals, focusing on mental & physical health and

barriers to work alongside the wider determinants of wellbeing. Coventry and

Warwickshire will run a Year of Wellbeing in 2019 driven by the European City of

Sport and develop wellbeing and productivity.

• Youth unemployment, developing a fresh new approach to working with young

people through the Transition to Work scheme to create a sustainable pipeline of

young talent in the region.

• Social enterprises, to diversify the types of economic activity available to create

opportunities and improve wellbeing and productivity for people and communities.

The Social Economy Taskforce will report findings in the early spring. It is anticipated

to commit to a growth in the size of the social economy within the WM; a regional

and/or mayoral financing mechanism to support this (such as a regional SE bank, or

Mayor’s bond); and the drawing together of support mechanisms for SE start-up and

scaling.

• Vulnerability, mental health and complex needs – a number of interventions (both

via the WMCA and with partners) focused on the relationship between vulnerability,

wellbeing and work, such as our Individual Placement Support trial (developed with

DWP’s work and health unit), Thrive at Work, and partnerships with the West

Midlands Fire Service, West Midlands Police and the Office of the Police and Crime

Commissioner focused on prevention.

6.9 GVA helps us measure the pace of growth but not who is benefitting. We have developed

an Inclusive Growth Framework which seeks to capture the positive social and

environmental outcomes that the West Midlands would like to realise as a consequence

of its economic activity. The Combined Authority will ensure that the Inclusive Growth

Framework continues to be developed and refined and is used in monitoring the

27

delivery of our wider social and economic goals, including this local industrial strategy,

looking at who is benefiting from the actions and where more needs to be done to

ensure inclusive growth.

28

7 Sectors

7.1 This section sets out the strengths we have across our major sectors. Identifying the

specific dynamics of our industries, supply and value chains is an important factor in

ensuring that we prioritise the right actions to drive inclusive growth and productivity,

so our people and businesses can take advantage of the opportunities ahead. We have

worked closely with sector trade bodies and groups such as the Midlands Aerospace

Alliance and the UK Metals Council, as well as academic experts, to ensure we

understand both current and emerging sectoral trends and strengths. Ongoing activity

to implement sector-specific actions will be done via close working with trade bodies.

7.2 More detail about the productivity and growth of specific sectors can be found in our

detailed evidence report at DN [insert hyperlink].

Sector Productivity

7.3 Over the last 18 months, the West Midlands has undertaken a range of comprehensive,

independent studies to understand our clusters and sectors as well as the underpinning

drivers of our output and productivity. Both elements are important. We explore the

West Midlands economy in relation to the foundations of productivity in section 6. In

this section, we identify the specific sector specialisms that are driving growth.

7.4 The productivity gap is reflected across all broad sectors apart from Low Carbon &

Environmental Technologies (+£16,085). The region’s manufacturing strength is

displayed through its marginal productivity difference with the UK average in this

sector (-£423). Sectors with the highest productivity gap between the West Midlands

and the UK are BPFS (-£15,418), Digital and Creative (-£7,157) and Logistics &

Transport (-£6,643), which are also core to meeting our strategic objectives, creating

an important link between future growth and productivity improvements.

Sector Strengths and Specialisms

7.5 The West Midlands makes up around 10% of the UK aerospace industry. Clusters exist

in the engine supply chain around Rolls-Royce and electro-mechanical systems, like

UTC Aerospace Systems and Moog who are two of the world’s leading producers and

suppliers of aircraft actuation systems. Focused on civil aircraft, West Midlands

products and services from throughout the supply chain contribute to the latest

passenger planes made by Airbus, Boeing and BAE Systems.

7.6 The West Midlands has a significant rail supply chain, particularly in activities at the

higher end of rail design and engineering, and upcoming opportunities around digital

rail. The sector is underpinned by academic excellence and private sector leadership

through Birmingham Centre for Railway Research and Education which specialises in

digital rail technology and is the lead partner in a £92m industry-partnered investment

in research on digital train technology through the UK Rail Research and Innovation

Network (UKRRIN). The area is also home to the Quinton Rail Technology Centre and a

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testing ground for Birmingham University’s hydrogen propulsion research; and a

cluster of transport design businesses - for example companies that designed of the

interior of the new Hitachi IEP 800 Series, Disneyland Europe amusement park rides

and Suncheon Bay light rail in Korea. Major planned investments, including HS2,

Midland Metro Extension and projects in Control Period 6, present significant

opportunities for growth and innovation locally. Our strategy is to integrate these

investments so the benefits are felt across the whole of the rail sector and communities.

7.7 The regional logistics sector is enjoying significant growth with a 66% increase in the

number of businesses in the past five years. Driving productivity gains through

investments in distribution centres and emerging technologies such as automated

guided vehicles (AGV) in warehousing, virtualisation technologies to monitor and

utilise capacity in vehicle fleets to smooth demand, connected and autonomous vehicles

and integrated delivery systems to increase transport efficiency. The sector is core to

the wider changes in mobility services and will significant change in skill requirements

and occupations going forward.

7.8 Key in underpinning these transport related industries are the cluster of foundation

industries within metals and materials. Their historic presence and current and

future expertise for advanced manufacturing plays an important role in the regional

economy, contributing 75,000 jobs and £4bn GVA. The supply chains are robust, and

their continued success is integral to the businesses they supply. Without the local

supply of quality material and products from both metals and materials many of the

area’s better-known industries (e.g. automotive, construction) would be less successful.

Metals and materials supply is the bedrock of the West Midlands’ manufacturing

economy.

7.9 The West Midlands has a significant automotive sector, producing one third of the

nearly two million vehicles manufactured in the UK. The region has 35 automotive OEM

brands, major R&D and headquarters operations, and over 20 vehicle manufacturing

sites. The cluster has attracted and retained global brands Jaguar Land Rover, Aston

Martin Lagonda and BMW (engine manufacture), Geeley London Electric Vehicle

Company and smaller, niche manufacturers. Both CWLEP and GBSLEP areas employ

more people in the sector than any other in the country. Many of those employed locally

are within SME supply chain firms; one fifth of the UK’s motor vehicle parts and

accessories businesses are located in the West Midlands region, reflecting that our

automotive expertise goes far beyond the presence of OEMs. The Black Country in

particular is home to a deep and diverse network of tier 1, 2, and 3 component and

engineering suppliers that extends out across the region.

7.10 There are significant existing strengths and innovative capacity in powertrain and

battery propulsion, connected and autonomous vehicles, and prototyping and product

development. Successfully delivering these high-level, high technology ambitions

requires a wholesale adjustment across all levels and particularly relies on the

innovative capabilities of our supply chains to respond and be fully integrated within

the development of new technologies and products.

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7.11 Similarly, the region’s distinctive low carbon expertise makes the West Midlands an

attractive market for commercialising new energy and transport system technologies

in the UK. This sector is the most productive sector in the West Midlands, with GVA per

employee that outstrips the national average.

7.12 The advanced manufacturing economy also underpins a food and drink sector which

has seen the greatest long-term growth in food and drink manufacturing of all UK

regions. Smaller, artisan producers play an important and high value-added role linking

to both our wider tourism sector and our dynamic agricultural base.

7.13 Our growing creative sector includes important maker clusters, globally recognised

product and process design, and a globally significant concentration of firms in gaming,

innovative and immersive content and high-end production, centred on screen media

including film, TV and virtual reality (VR) and augmented reality (AR). The creative

sector underpins, supports and cross-cuts into many of our key sectors, and there are

huge opportunities to support and facilitate this further cross-fertilisation, building on

our strong digital creative business base.

7.14 Our thriving BPFS is the region’s largest GVA contributor and employer with the UK’s

largest regional full-service banking and professional services cluster, serving a global

client base. A strong and distinctive Birmingham city centre is complemented by a

range of other key options and locations (both in town and out of town) around the

West Midlands, including Coventry, Worcester, Leamington and Stratford-upon-Avon,

which provides a wide and varied choice for companies of all sizes. The sector brings

region-wide benefits through positive spill over effects via the access to capital and

providing for the growth of businesses in other industries. The cluster is supported by

world class business schools, including Aston, Birmingham and Warwick, resulting in

more business students than any location outside London.

7.15 New technologies and world class assets support a high value medical technology and

life sciences cluster. There are particular strengths in R&D, design and production of

high-tech medical devices (firms like Salts Healthcare and Kimal), diagnostics including

in-vitro (The Binding Site, Serascience, Perspectum) and software as a medical device

(Safe Patient Systems, Evolyst). The region’s strengths in med-tech include the

application of AI, digital and data analytics, with the West Midlands as an important

location for clinical trials. The region’s NHS Trusts and universities attract large

numbers of trials from global industry to an international centre of expertise in

accelerated trials models and a track record in health data collection.

7.16 Industrial know-how in advanced manufacturing is strongly related to major

construction activity and expected spending of £3.8bn per year for the next five years

in transport and housing investment. This is the third largest sector in the West

Midlands with companies across the supply chain operating locally. Offsite construction

and other modern methods of manufacturing (MMM) are a distinct opportunity for the

region to deliver its 215,000 homes and other large infrastructure commitments.

Offsite construction is already happening – evidenced by WM-based firms like LoCaL

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Homes and Totally Modular – and there’s a key opportunity for the region to develop a

world-class capability in this activity going forward.

7.17 The West Midlands is the UK’s fastest growing region for international visitors –

attracting a record 2.3 million overseas visits in 2017, up by nearly 50% over the last

six years. We have an already world class tourism offer, building on the global draw of

Shakespeare’s England, the Black Country Living Museum, key heritage assets, and a

range of sporting and events based attractions. The City of Culture 2021 and

Commonwealth Games 2022 provide a unique platform to further raise the global

profile of our area and enable our tourism sector to capitalise on these opportunities

to expand the visitor economic and business tourism levels to drive economic growth

and leave lasting community legacies.

7.18 The related industries of retail and hospitality are significant at the local level. They

play a key role in the functioning of our city and town centres, which are undergoing

significant changes and challenges. The sectors also provide a route out of

unemployment and flexible working. The challenge is to build progression pathways

through these sectors to upskill workers, increase productivity, improve wage growth,

and to support the sector to change and evolve to meet new expectations and embrace

future technology.

The Black Country Living Museum and Castle Quarter case study

Across 26 acres of exploration, The Black Country Living Museum recreates the area’s

proud industrial heritage, attracting almost 300,000 visitors annually. An open-air

museum brought to life by costumed characters in original shops, houses and

workshops, the museum is a key visitor economy attraction in the region which

continues to invest and develop. ‘Forging Ahead’, the museum’s 40-year masterplan for

further developing the site, will create a world-class heritage attraction in the heart of

the Black Country. Phase 1 of the masterplan, part-funded (£9m) by Black Country LEP’s

Land and Property Investment Fund (LPIF), represents an investment of £23.7million in

a project to engage and inspire visitors of all ages to learn about the Black Country’s

heritage, its impact on the world, and its relevance today.

The Black Country Living Museum forms part of a thriving tourist attraction hotspot in

Dudley’s Castle Quarter. This area provides a wide range of attractions including Dudley

Zoological Gardens, Dudley Canal Trust and Limestone Mines. Further reflecting the

Black Country’s diverse industrial heritage and unique identify, the Black Country has

the ambition to become a Global Geopark, with parts of this also focused on the Castle

Quarter. The Black Country’s geological and industrial history has ensured it’s now an

amazing place to explore with many ‘hidden gems’ of world class natural and manmade

wonders to be found and explored. A Global Geopark status recognises an area’s

outstanding geological heritage and where there is considerable effort to conserve it and

increase the public understanding and enjoyment of it. UNESCO are responsible for

granting Geopark status’, and the Black Country has applied for this

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8 Actions to drive growth and productivity

8.1 In this section we set out the actions we are going to take. They are grouped by four

foundations of productivity, reflecting how they are targeted, based on the evidence,

with place being integrated into each. In each section we also summarise the inclusive

growth impacts.

Ideas

8.2 With a long history of commercial and academic research and business innovation,

the West Midlands has the potential to further increase both new to firm and new

to market innovation in products and services by further building capacity and

capability.

8.3 Ours is an innovative economy built on the development and commercialisation of new

ideas, processes and products. Our innovation is driven by the creativity of companies

and Universities in the West Midlands, founded in our history as the place where the

first industrial revolution was commercialised, driving growth across the UK.

8.4 The West Midlands has a long standing, sophisticated and thriving innovation

ecosystem, with a diverse mix of research and applied universities, commercially

engaged academics, science parks, incubators and the largest concentration of

accelerators in the country (NESTA, 2017). We are home to two of the UK’s strategically

important Catapults in High Value Manufacturing and Energy Systems. And our

universities are consistently ranked in the top 20 nationally for the quality of their

research.

8.5 Innovation in industry, academia and R&D is focused in our core economic and business

areas of advanced manufacturing and engineering, digital technologies, data and

systems integration with a particular strength across the whole West Midlands in next

generation transport systems, data-driven healthcare technologies, and energy

generation and storage.

8.6 The major opportunities are driven by rapid innovation in the way that firms use data

in the development of new products and implement data in the configuration of new

business growth. Cities, towns and local areas across the West Midlands will be the first

to benefit from cutting edge 5G capabilities.

8.7 Universities, developers and the public sector have invested substantially in incubator

space, science and technology parks and in the availability of finance and access to

university and business partnerships. Together with substantial business networks

and support for specific technologies and capabilities (such as battery manufacturing,

CAV vehicle design and testing, digital rail, energy generation and storage, and data for

future healthcare), these will continue to be the pillars of our innovation ecosystem

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beyond the existing funding streams. The innovation infrastructure is widespread and

clusters around key institutions. The challenge is ensuring that this capability and

capacity percolates into the supply chains as well as frontier firms.

Figure 5 Innovation Assets

Source: ONS Business Register and Employment Survey (2016) and SQW (2017) A Science and

Innovation Audit for the West Midlands

8.8 Businesses across the region invested £2.3bn in R&D in 2016 and this is on the rise.

Since 2010 we have increased our share of all UK investment. We perform above

average in Innovate UK funding awards, though there are spatial variations, which is

primarily driven by the nature of our business base.

8.9 Innovation is concentrated around the clusters of OEMs, universities and medium,

small and micro firms in these major sectors, for example around Warwick

Manufacturing Group and the automotive and aerospace clusters in Solihull, Coventry

and Warwickshire, manufacturing supply chain firms in the Black Country and creative

industries in Birmingham. There is the opportunity to go further, to broaden the

smaller scale commercial research and process innovation undertaken by firms in our

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supply chains who find it difficult to engage with the innovation ecosystem. There is a

key role for universities to broker the connection between national research and

innovation funding to deliver benefits for the region.

8.10 Our regional innovative capacity is not confined to any one sector, meaning that

capabilities in research and development, design, production and aftercare spans

multiple industries, putting firms at the forefront of innovation across as well as within

specific sectors.

Clear opportunities to strengthen business innovation

8.11 Around 46% the output gap between the West Midlands and the UK is caused by

weaker performance in competition, investment, enterprise and innovation.6

8.12 Levels of process innovation and commercialisation are lower than they could be. And

we need to increase business demand for new techniques and technologies. Our aim is

to drive up levels of business innovation by supporting improvements in business

capacity and subsequent demand.

6 Based on 2017 output gap analysis.

STEAMhouse case study

STEAMhouse is a co-working space for businesses, artists and academics designed to

enable small companies and artists to work together on new projects and business ideas.

There are facilities such as 3D printers, laser cutting machinery, virtual reality and

printing studios.

STEAMhouse will drive innovation and research to create business solutions that fuel

long-term economic growth through a combination of industry-led workshops, access to

product development facilities, partnership working and SME grant-making. The first

phase of STEAMhouse launched in spring 2018 and will engage with at least 200 SMEs in

the Greater Birmingham Solihull Local Enterprise Partnership (GBSLEP) area over a

three-year period. The second phase of STEAMhouse is already in development with

construction due to commence in spring 2019.

£3bn

Insufficient skills levels

£5.2bn

Fewer residents in employment

£6.9bn

Weaker performance in

competition, investment, enterprise & innovation

35

8.13 Our academics and researches are at the forefront of global trends in the clean

movement of goods and people and the development of new products and services. We

know that these changes provide significant opportunities for our supply chain firms in

automotive, rail and aerospace who specialise in materials, metals and components,

alongside the need to continue to further innovate production processes and

techniques.

8.14 Our strategy therefore is to continue to ensure the availability of both space and finance

for innovation, whilst further developing the business led and peer to peer networks

and connections that the evidence shows are most effective in helping firms innovate.

We want to encourage our businesses of all sizes to ensure that innovation becomes

part of “business as usual”. We are committed to closer working between institutions

to maximise the West Midlands research contribution to national and local

opportunities and to making it easier for new and existing businesses to access our

world leading assets and new support programmes.

• Innovation networks and linkages: We will support business networks and

programmes to join-up assets and entrepreneurs, and help identify the

opportunities for collaboration across sectors, technologies and supply chains.

• Innovation investment programmes: We will create new support programmes

integrated with local supply chains, including through demonstrator projects,

supporting broad and accessible investment and access to a good supply of

appropriate finance products on attractive terms.

• Innovation talent: We will support high growth potential business with the skills

needed to innovate, through programmes in universities, Catapults, and technology

innovation networks.

• Innovation intelligence: We will create a West Midlands foresight programme to

generate new ideas and promote awareness of latest market demand from large

firms and the public sector for innovative SMEs as well as technology drivers of

change.

• Innovation culture: We will continue to create opportunities to showcase the

impact and importance of innovation across the West Midlands’ public and private

sectors.

8.15 In addition, we are working closely with Government to embed a number of initiatives

within the West Midlands innovation ecosystem, including:

• Driving innovation through planned procurement of capital investment in the West Midlands.

• An industry-focused regional grant scheme (for our innovators who have difficulty

securing Innovate UK monies) with a range of funding options.

• Wrap-around business support with innovation and R&D at its centre.

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• Integrating the approaches described above into a new Productivity Factory, acting

as an access point for peer-to-peer mentoring and repayable grants for project

design and implementation.

• Sharing and development of intellectual property (IP) for collaborative innovation

and consideration of where IP finance can improve the access to finance for

innovative companies

8.16 We are investing in innovative spaces and networks to enable cross discipline

intellectual property (IP) sharing and commercialisation, for example at the

STEAMhouse project with Birmingham City University. We are developing creative

sector specific financing opportunities and pathways and have put in place innovative

programmes to further enhance the transfer of skills and techniques between the core

industry and the potential it has to grow productivity in other sectors.

Innovation delivering inclusive growth

8.17 Innovation drives improvements in individual firms as well as across whole industries.

A more innovative West Midlands will be an environment with more productive and

competitive businesses that create and attract better paid and higher skilled jobs (for

instance in traditionally low paid, low skilled sectors such as retail, hospitality, logistics

and health & social care).

8.18 As well as continuing to support high tech innovations, our local industrial strategy

commits to encouraging a broader and more inclusive innovation policy that can help

supply chain SMEs across the West Midlands to contribute to the West Midlands

distinctive strengths by moving into new markets and supply chains.

Warwick Manufacturing Group (WMG) case study

WMG is one of the world’s leading research and innovation groups. Since its inception in

1980, WMG’s mission has been to improve the competitiveness of organisations through the

application of value adding innovation, new technologies and skills deployment, bringing

academic rigour to industrial and organisational practice.

WMG is a pioneer of innovative technology, leading major multi-partner projects to create

and develop new products and processes that can be adopted by organisations.

WMG’s new National Automotive Innovation Centre is the largest of its kind in Europe and

the product of partnership with Jaguar Land Rover and Tata Motors. The centre will focus

on automotive research, combining expertise from industry, university academics and

supply chain companies. It is intended to support advances in technology to reduce

dependency on fossil fuels and vehicle emissions whilst also developing the talent required

for the demands of emerging technology. This is in addition to the existing facilities.

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People – Skills and Employment

8.19 The West Midlands has a young and diverse population, brimming with potential and

opportunity. There are 1.8 million people under 25 in the region (32.5% of the

population), making the West Midlands the youngest region in the country outside of

London7. Of the 52,000 graduates from eight West Midlands universities, 71% stay on

to work here. The employment rate is growing faster than the UK as a whole and we

have the lowest number of people out of work for ten years.

8.20 We have record levels of employment and things are improving. Since 2012, the

number of people with higher level skills increased by 113,000, faster than the national

average and the number of people with no qualifications is falling faster than the UK

average.

Manufacturing Technology College (MTC) Advanced Manufacturing Apprenticeship

Centre case study

A £36m Advanced Manufacturing Training Centre (AMTC) has been developed at MTC in Ansty

Park, Warwickshire to provide a flagship facility for advanced apprenticeship programmes.

Having been named as one of the UK’s top 100 apprentice employers, courses here are setting

the standard as the future of advanced manufacturing apprenticeships.

Apprentices learn the latest technology in areas such as intelligent automation, additive layer

manufacture, robotics, metrology, mechatronics, additive layer manufacture, computer aided

design (CAD) and computer aided machining (CAM). Apprentices will be able to test and

develop their skills in sponsored placements, including the opportunity to undertake

international assignments with MTC members and supporters.

With communities that miss out 8.21 The evidence points to concentrations of low employment and high levels of

unemployment and deprivation, where social mobility, wage growth and access to

opportunities have persistently lagged behind overall growth and act as a break on

productivity between the West Midlands and UK driven by challenges around our

population. However, these areas often sit alongside areas of strong employment

growth, high demand for labour, and businesses complaining of recruitment difficulties

and skills shortages. These equate to £3bn through lower skills levels and £5.2bn

through fewer residents in employment. Together they account for 54% of the output

gap.8

7 3 LEP geography 8 Based on 2017 updated output gap analysis.

38

8.22 We see concentrations of deprivation in close proximity to growth areas. To an extent,

this is an issue of connectivity, and the elements which relate to infrastructure

provision are set out below. But this challenge goes wider, so we also have targeted

labour market interventions, as set out in our Skills Plan and as agreed in a £69m

Skills Deal with Government to deliver on this plan.

8.23 The West Midlands has amongst the lowest employment rate of any mayoral combined

authority (71%) and an above average unemployment rate of 5.7%. There are

particular weak spots, including in parts of Sandwell, Birmingham and Wolverhampton.

Whilst annual wages are on the rise, one in four pay below the ‘real living wage’. Too

many of our communities don’t enjoy the access to jobs, skills and support for

enterprise that they should, and face entrenched structural issues resulting in poor

economic, social and health outcomes. Some communities face the challenges of an

ageing society and the associated pressures on health and social care.

8.24 Around 50% of five-year-old children in the West Midlands do not achieve a good level

of development compared to 34% nationally. Nearly a third of children in the region

grow up in poverty and by Year 6 almost a quarter are obese. Healthy life expectancy is

lower than the UK average. Black and minority ethnic (BAME) employment rates are

15% lower than for white groups. And for women from an ethnic minority background

the employment rate is much lower than white women. There are similar disparities

for those with disabilities and low or no qualifications.

£3bn

Insufficient skills levels

£5.2bn

Fewer residents in employment

£6.9bn

Weaker performance in

competition, investment, enterprise & innovation

39

Figure 6 Employment rate (2016)

Source: ONS Annual Population Survey (2016)

8.25 The West Midlands also performs below the national average on educational

attainment. Spatial analysis highlights a general pattern of poorer outcomes in the West

of the Combined Authority area and a more positive picture in the East. On basic skills,

11.4% of West Midlands residents had no qualifications in 2017 compared to 8%

nationally. And parts of the Black Country have the highest proportion of the working

age population with no qualifications or NVQ1. There is a ‘missing middle’ of technical

skills at Levels 2 and 3. Less than a third of West Midlands residents are qualified to

NVQ Level 4+. Matching the national average will require a further 184,867 people to

be qualified to this level.

40

Figure 7 Proportion of residents with NVQ4+ (2016)

Source: Metro Dynamics estimates based on ONS Annual Population Survey (2016) and Census

(2011) data

Connecting Communities case study

The Connecting Communities Programme is an innovation pilot funded through the

Department of Work and Pensions as part of West Midlands Combined Authority’s first

devolution deal. The approach is based on providing employment support within the heart of

communities with a connection with that community being the only eligibility criteria.

An early example of how the project is making a real difference to people within the

communities from the perspective of one of the contracted providers is detailed below:

“K heard about the project running from the local library and approached the project

accompanied by his father. He was very reserved and reluctant to communicate without

support from his father. After building both rapport and trust, it was identified that K has autism

41

and finds it difficult to talk to new people. Through developing an action plan we were able to

support towards help make the next step into employment.”

An Inclusive Strategy

8.26 We will use devolved powers and funding to deliver a high quality and responsive

regional skills and education system, to provide people with the skills they and

businesses need for the future. We know that this alone will not be enough. So, we are

also acting to improve accessibility, through transport and digital infrastructure, and

through raising awareness of the jobs and opportunities that are available, particularly

for communities that have historically been disconnected from growth.

Actions

8.27 We will deliver 5 strategic interventions as outlined in the Regional Skills Plan, those

most directly targeting inclusive growth and productivity are summarised below:

1. Prepare our young people for future life and work

8.28 Our new approach to tackle youth unemployment identifies the need for individualised

support, across the existing silos in careers, health (mental and physical), travel,

housing, childcare, and others. This will include measures to prevent, as well as tackle,

youth unemployment and ensure that we are nurturing young talent.

• Create a West Midlands Career Learning Hub to enhance the impact of careers

education and advice.

• Celebrate and promote young talent across the region and extend the Mayor’s

Mentors programme to encourage more young people to access regional

opportunities.

• Work with the Department of Work and Pensions to support the testing of

‘progression coaches’ in Birmingham and Solihull. The coaches will support and

mentor unemployed and disadvantaged young people as they work towards gaining

and progressing in an apprenticeship or other job.

• The Apprenticeship Promise - a commitment to working with local employers to

make sure an apprenticeship or training place is available to every young person in

the region that wants one.

2. Create regional networks of specialist, technical education and training to drive

up skills and productivity and underpin economic growth

8.29 We will address shortages of specific skillsets like engineers by boosting the uptake of

vocational training through apprenticeships and preparing to deliver T-level routes

and better match skills provision to employee need.

• Seek full Government backing for two Institutes of Technology (IoTs) to deliver T-

levels. Dudley IoT will redevelop land to provide teaching facilities for higher level

skills programmes. The Greater Birmingham and Solihull IoT focuses on advanced

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manufacturing and industry 4.0 through greater collaboration of Further and Higher

Education and creating clear pathways from level 3 to level 6 apprenticeships.

• Create employer-led taskforces and sector action plans for each of our priority

sectors, representing a cross section of businesses, to drive curriculum and skills

provision that meets employers’ needs.

• Launch the West Midlands new Digital Skills Partnership to link the region’s existing

and emerging digital offer with national and sector-based initiatives.

• Help workers in retail, logistics, hospitality and other low paying sectors to move up

the value chain through in-work progression and support retraining for those whose

jobs are at risk of automation.

• Through the devolved Adult Education Budget (AEB), increase the volume of

qualifications delivered at all levels in priority sectors and develop flexible models of

learning to support adults in work to upskill.

3. Accelerate the take up of good quality apprenticeships across the region –

double the number by 2030

8.30 Apprenticeships form a central plank of our strategy to grow the supply of skills that

employers in our region need to achieve growth. Our region is home to some of the

country’s best apprenticeship programmes, providing world class training and support

that enables businesses and our residents to compete globally – but we need to do

more. We will:

• Maximise Apprenticeship Levy investment for the West Midlands through a regional

campaign targeting employers, young people, employees and key stakeholders to

consider apprenticeships.

• Direct £40m Apprenticeship Levy funding to support more apprenticeships for SMEs,

targeting Science, Technology, Engineering and Mathematics (STEM) skills in our

priority sectors and supply chains.

• Establish a regional pre-apprenticeship and traineeship offer including piloting

Access to Apprenticeships in growth sectors.

• Provide a brokerage service to employers to promote apprenticeships as a key tool

for workforce development, supporting them to identify the best apprenticeship

programme and apprenticeship training provider to meet their business needs.

4. Deliver inclusive growth by giving more people the skills to get and sustain good

jobs and careers

8.31 Despite record employment levels, we need to get more people into work to tackle that

element of our output challenge. One of the most direct ways of improving inclusivity

is through good quality employment with the opportunity to progress.

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8.32 We will tackle low employment and high unemployment in specific areas by:

• Supporting those out of work and on low incomes in targeted communities – this

starts with us delivering our £4.7m Employment Support Pilot – Connecting

Communities - to test and learn what works.

• Providing a new employment support service for people with a mental health and/or

physical health conditions in primary and community care through the Thrive into

Work project. The success of this project will shape the roll out of the Individual

Placement Support model for other cohorts.

8.33 Delivering £100m+ of investment in future training and skills provision through the

AEB and £10m worth of retraining funds and strengthening the upskilling of low paid

and low skilled residents to bolster their long-term career and income prospects.

5. Grow collaboration between partners to support achieving even more

collectively

8.34 The West Midlands is successful in engaging partners in the skills agenda. Close

working relationships are in place with the Further and Higher Education sector as well

as the three LEPs and local authorities. These relationships go beyond passive

engagement to all partners playing a meaningful and active role in developing and

delivering regional plans, with appropriate local flexibility to address local labour

market conditions.

8.35 Local partners are working together to develop an approach that will further integrate

investment in transport, skills and services to target specific communities or groups in

focused inclusive growth corridors or locations. The aim is to develop approaches

which improve the overall impact of investment, and accessibility to skills, jobs and

business opportunities for local people.

• Closer working with community based organisations to develop local access and

progression pathways.

• Development of local learning routeways from compulsory education, through

further, higher and career development learning.

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Elite Centre for Manufacturing Skills (ECMS) case study

Funded through the Black Country Growth Deal, the flagship £12.4m Elite Centre for

Manufacturing Skills (ECMS) functions as an employer-led training facility, designed to

improve productivity and growth in advanced manufacturing through demand-led training

provision, delivering training that does not currently exist in the Black Country.

The ECMS follows a ‘hub and spoke’ model with equipment and facilities being installed across

four sites in the Black Country. The Hub will be an 800 sq m regeneration of an historic but

derelict building at the University of Wolverhampton’s new Springfield Brewery site, with

additional ‘spokes’ in foundry and patternmaking (Dudley Port), toolmaking (West

Bromwich), and metal joining and advanced machining (Dudley) in other parts of the Black

Country.

Skills provided by the ECMS partnership have been identified by businesses as current and

future barriers to business growth and are delivered through both apprenticeships and short

courses, for example at Dudley Advance, Dudley College’s Centre for Advanced Manufacturing

and Engineering Technology.

Skills Factory case study

The Black Country Skills Factory is an employer-led education and training collaboration

which aims to address the shortfall of skills in the Black Country and increase the pipeline of

suitably skilled staff to respond to growth. It has been a highly successful project in addressing

skills shortages in the advanced manufacturing sector.

The aspiration is to fundamentally shift the relationship between employers and education

providers to develop a networked approach to skills delivery that is needs-driven by industry

demand for skills whilst also meeting general “best practice” standards

Training and education courses are co- developed and co-delivered using shared facilities and

industry trainers. This results in the provision of “bite-sized” skills training courses which fit

the current and future needs of highly technical industries.

Construction Gateway

The Construction Gateway has been established by the Combine Authority in response to

major projected growth in the demand for construction jobs, of which HS2 is significant, but

so too is the £350m housing deal, delivering 250,000 new homes – both traditional and

systems-built. It is crucial we ensure that local people can access these opportunities, so that

employers looking for skills, or people looking for a job, an apprenticeship or a move up know

where to go for help and support.

The Combined Authority has £5m three-year programme to train over 2,000 new recruits

linked to specific major projects. The programme would also engage 300 schools and host a

number of careers events across the region. A partnership of the Further Education Skills and

Productivity Group network of colleges, training providers, Job Centres and local authorities

will work closely with developers to provide a supply of recruits across the whole range of

skills areas and levels.

Working through hubs in Coventry, Birmingham and the Black Country, the emphasis is on

providing the training and support needed to enable more unemployed and/or low-waged

entrants to develop the skills needed to enter and sustain employment in the construction

sector. This will include accreditation through the CSCS scheme.

45

Business Environment

Business dynamism is mixed

8.36 GVA per employee varies significantly across sectors in the West Midlands and the

average GVA per employee is below the national average.

8.37 Four sectors exceed the regional benchmark on the GVA per employee measure of

productivity (£42,897): Low Carbon and Environmental Technologies is by far the most

productive sector (£134,638 GVA per employee), followed by Digital and Creative

(£65,151), Business, Professional & Financial Services (BPFS) (£60,212) and Advanced

Manufacturing and Engineering (£58,036).

Figure 8 Business dynamism (2016)

Source: ONS Business Demography (2016)

46

8.38 Business dynamism and productivity is also impacted by low business stock9. Between

2016 and 2017, the number of businesses increased by 9.6%, compared to national

growth of 6.1%. Between 2013 and 2016, growth outstripped the UK too. This growth

has occurred primarily in Greater Birmingham and Solihull. Despite this recent

performance, the Combined Authority needs to increase its business stock by 17,133 in

order to reach the national average.

8.39 On start-up rates, CWLEP performs well against the English LEP average but BCLEP

lags the benchmark; in contrast BCLEP performs well on survival rates.

Global Supply Chains and Exports

8.40 We are the fastest growing UK region for goods exports and experienced 27% growth

between 2015 and 2017. Outside London and the South East, we export the most by

value, over £33bn in 2017. And between 2011 and 2018, 775 Foreign Direct Investment

(FDI) projects have created nearly 46,000 new jobs and the number of projects per

annum has more than doubled. Our supply chain firms are competitive in a range of

global markets for aerospace, materials, rail, automotive, healthcare devices and

marine, providing flexibility and quality design for a diverse range of sectors.

8.41 There is uneven direct distribution of inward investment jobs – most go to the GBSLEP

area (71%). One quarter are created in CWLEP, but only 5% in BCLEP. Our FDI success

has significant impact on supply chain firms and related jobs, many of which are

concentrated in the Black Country.

Supporting SME growth and productivity.

8.42 To successfully drive up productivity we will focus not just on those who already

innovate, trade and are growing. We will also provide support for those firms where

there is potential for further growth and productivity, where innovation could unlock

greater success and renewal. Many of our SMEs are well established manufacturing

firms whose future success will depend on new approaches. These will include the

mindset and growth orientation of individual business leaders/entrepreneurs, access

to, and effective use of, technologies, investment readiness and appetite and

management and entrepreneurial capacity.

8.43 Firms continue to report issues with finance from both the supply and demand side.

This is both about maximising uptake of existing loan and equity finance and attracting

more private investment. It also means working with our businesses to ensure that they

are investment ready through business planning, support and advice from

entrepreneurs. Better access to finance will allow more firms to start-up, scale-up and

pursue profitable lines of activity.

8.44 We know that management practices can play a central role in firm performance, both

within and across industries. By building on successful existing programmes, we can

9 Number of businesses per 10,000 population

47

maximise our management and leadership capabilities through peer-to-peer

mentoring.

8.45 We will improve competitiveness of our globally significant concentration of leading

advanced manufacturing and engineering businesses through supply chain SME

support led by businesses for businesses.

8.46 We will develop a virtual Productivity Factory, using expert industry benchmarking

and coaching, masterclasses on management processes, to cover accessing new

markets, supplier efficiency and sector-specific topics, targeted at SMEs.

8.47 We are investing with the Department of Culture, Media and Sport (DCMS), Aston

University and Creative England in small and medium enterprise (SME) growth and

support programmes, with creative industry specific pathways.

8.48 We will also launch a fund for new industry co-investment to provide wrap-around

support for businesses looking to grow into new sectors, supply chains and markets,

who need to invest in new technologies and capital to grow into those markets.

High growth SME support

8.49 We will develop further dedicated, segmented and locally appropriate business

support focused on our highest growth potential industries through dedicated

“cluster” support and expand scale up support for high potential companies that will

help position them to provide the good jobs of the future.

8.50 We will increase internationalisation by continuing to leverage national resources and

the Midlands Engine brand, focussing on both high value contracts and those new

exporters and securing first overseas orders. This will include identifying and

accessing new markets with a particular focus on smaller businesses, which may not

currently be supported.

8.51 We are establishing a business led Creative Innovation & Talent Hub to discover,

develop and showcase new creative content and diverse talent in broadcasting, arts,

games and social media and develop and implement an ambitious cultural investment

programme.

Maximising the business impact of unique events.

8.52 We will use the opportunity of the Commonwealth Games and City of Culture to

provide targeted support to drive productivity through the visitor economy,

developing bespoke qualifications for staff looking to step into management roles,

providing key underpinning skills and competencies together with the business

insights required, including through focussed support to extend the season and further

increase business tourism.

48

Infrastructure

Transport and Mobility

8.53 The West Midlands is a well-connected region with 90% of UK markets no more than a

four-hour drive away. We have one of the UK’s fastest growing airports, carrying 13m

passengers a year on 50 airlines to 143 destinations. HS2 will put the centre of

Birmingham and UK central within 40 minutes of central London. We are a major

location for logistics and the movement of goods as well as people. Our central location

means that all north west to south east or north east to south west national movement,

whether for freight or passengers, travels through or around our conurbations.

8.54 Recent growth has put our existing transport system under a great deal of pressure,

leading to poor air quality and costly congestion. We are over-reliant on the road

network and private transport, with only 41% of residents able to access three or more

strategic centres by public transport within 45 minutes during morning peak times.

Physical access to jobs and skills is still an issue for too many people in the West

Midlands. Many of our more rural areas continue to face transport challenges, and it is

important to ensure that they are “connected to the connectivity” that the West

Midlands has. We are committed to a long-term ambitious programme to address

infrastructure deficits, with early action in priority areas to ensure all areas have the

infrastructure needed. The focus is on alleviating congestion within the main urban

areas and the routes between metropolitan and neighbouring areas that people use to

travel between their place of work and residence.

8.55 Similarly, we recognise the pressure that our infrastructure system puts on the natural

environment, and that inequality of access to natural spaces has a significant

detrimental impact on our most disadvantaged communities. Our proposed investment

in natural capital strives for better connected, healthier and more productive

communities.

Inclusive Growth Corridors

8.56 We also see pockets of deprivation close to major growth corridors. We are therefore

focussed on integrating our actions in those parts of the West Midlands where the

evidence shows that communities are most disconnected and where relevant elements

of the output gap are most pronounced, using our investment to drive long term

opportunities for growth.

8.57 These “inclusive growth corridors” will enable us to work with local communities and

businesses, to ensure that the delivery of large-scale infrastructure investment is

integrated with other programmes locally to maximise impact on employment and

skills, high quality housing and development viability and improved public green space

and air quality. Local Authorities are testing this approach with the Wolverhampton to

Walsall rail corridor, with more to be identified as we develop the approach. We are

also keen to explore how this concept could be applied to our more rural areas.

49

8.58 Our strategy is to work with our globally recognised firms and universities to integrate

a number of factors into the next stage of our infrastructure development:

• Mobility innovation

• Improving our natural environment and access to it

• Modern methods of construction

• 5G connectivity, ultra-fast & full fibre broadband

• Local energy solutions

• Accessibility to jobs, skills and services

Deliver £3.4bn of investment over the next ten years in trams, road and rail

8.59 We will build a fully integrated and seamless multi-modal transport system across the

whole region. A new Metro system, including East-West Metro with extensions to

Dudley/Brierley Hill and through East Birmingham to North Solihull and the HS2

Interchange station. Overall, we will deliver six new rail stations, over 31km of new

track and provide 20,000 new seats.

8.60 Figure 9 demonstrates planned rapid transit, additional metro stops, extensions and

railway stations that will link areas of high jobs density to new and existing

communities.

Connect all communities of the West Midlands to HS2 and bring the journey time between Birmingham and London to under 40 minutes

8.61 We will implement the £4.4bn HS2 Growth Strategy, including the Curzon Masterplan,

Interchange station in Solihull and 20 transport schemes to fully connect HS2 stations

to local transport networks and communities. A new West Midlands integrated control

centre will deliver the smartest streets and best managed network during HS2

construction. It will also help to reduce congestion during major events such as the

Commonwealth Games as well as improving journey times, air quality and productivity.

We are also keen to enable greater ability for our rural areas to be better connected to

this enhanced connectivity across the urban environment.

Be the first 5G ready region

8.62 There are still significant variations in superfast broadband, full fibre and gigabit

capable broadband coverage. We will continue to work to ensure more consistent

superfast coverage.

8.63 More than £50m will be invested to create the UK’s first multi-city 5G test bed across

Birmingham, Wolverhampton and Coventry. The West Midlands will lead the way for

the UK through the Government backed national ‘Urban Connected Communities’ pilot

which will be supported by strong supporting digital infrastructure including a full fibre

network

50

Figure 9 Planned network – linking high employment density and housing sites

Source: ONS Business Register and Employment Survey (2016) and WMCA

51

We are committed to ensuring that all our investments improve the natural environment

8.64 We want to celebrate and protect the high-quality natural environment, public spaces

and biodiversity that makes us a great place to succeed. In line with world-leading

economies, we will seek to use innovative solutions to address urban challenges like air

quality, flood water management, overheating in urban areas, and climate change

adaptation. We will ‘green’ existing transport routes and improve access for walking

and cycling.

8.65 We are committed to developing a long-term plan for Natural Capital. We are

committed to the principle of an annual net gain for natural capital and will develop the

tools that enable us to work towards reversing the current trend in biodiversity loss.

8.66 We will improve air quality through a strategic action plan for the West Midlands to

improve health and wellbeing and unlock new clean growth opportunities. By working

with the private sector, we will accelerate charging infrastructure for zero emission

vehicles across the region, driven by demand.

Energy

8.67 We are committed to innovation and delivering successful new approaches to energy

generation, storage and distribution integrated within our transport system and major

employment sites. We will meet the forecast need of our manufacturing sector, new

transport system, increased use of electric vehicles and 215,000 additional houses in

new communities. Future mobility, and the industrial base that will be at the forefront

of this change, will require specific additional energy requirements that need to be

addressed and catered for.

8.68 West Midlands industry spends over £2bn each year on energy and £15bn additional

expenditure is planned between now and 2030. We also have innovation strengths in

energy systems and storage as recognised in our Science and Innovation Audit. We are

home to a range of major energy companies including National Grid, Eon, Baxi and

Cadent. Clean energy is fundamental to economic growth and quality of life, and there

are significant challenges in the region around the energy infrastructure that will

underpin housing, industry, electric vehicles etc., as well as the issues of clean air and

fuel poverty. We are committed to demand side management around vehicles and

buildings, and local authorities are exploring the implementation of clean air zones

where relevant to tackle air pollution.

8.69 Energy Capital will develop a West Midlands devolved governance framework for

energy infrastructure and markets to maximise economic opportunities for industry,

support the creation of new markets and address citizen inclusion by reducing fuel

poverty. This will be based around proposed Energy Innovation Zones (EIZs) across the

region.

8.70 EIZs create local partnerships which bring together the right stakeholders for each

locality and are thus collectively able to manage energy investment risk efficiently

52

(particularly when innovative technologies are being commercialised or require

strategic infrastructure investment). Development and use of EIZs will provide a

simple, flexible mechanism to support integrated local energy infrastructure transition,

investment and accelerated deployment of innovation. The West Midlands has led on

the development of the concept of EIZs nationally and four pilot EIZs have been

identified.

8.71 Work on regional energy strategy has been underway for several years, with the

Regional Energy Policy Commission reporting in 2017. We will use this opportunity to:

• Establish a £500M public-private investment fund to support targeted clean energy investments unlocking productivity and GVA growth.

• Work with industry partners, Government and regulators to develop and pilot a new institutional model for managing regional energy investment and markets (a regional energy infrastructure commissioning and market-making body), designed to de-risk investment in meeting future energy requirements and to improve our ability to meet the infrastructure elements of increasing business and consumer demand.

Changes in affordability and a lack of social housing risks holding back growth and impacting our communities

8.72 Housing costs are increasing faster than local salaries. Most areas in the West Midlands

are in the top fifth of house price increases nationally. The West Midlands median

increase is 6%, more than double the national average. This has been exacerbated by a

lack of supply, quality, choice and mix of affordable and social housing. Typically, only

10% affordable housing is being delivered as part of city and town centre housing

schemes. The rate of housing completions in the region is rising. With population set to

increase by over 400,000 by 2038, we are committed to ensuring housing meets the full

spectrum of housing need.

Delivering 215,000 homes and driving productivity in construction.

8.73 We will increase the rate of housing delivery by implementing the £350m housing plan,

investing £250m in land remediation and developing the skills required through the

National Brownfield Institute in Wolverhampton. We will work to re-set the housing

contract and are firmly committed to delivering a broader choice of tenures and styles.

We will deliver quality through a West Midlands-wide design standard for new

buildings. We will encourage diversity and new entrants to the market to support this

increased delivery, such as through modular build, and support the provision of new

skills as the industry changes.

8.74 The scale of construction activity in the West Midlands in the decades ahead gives us a

once in a generation opportunity to work with the sector to transform productivity,

methods and delivery of new long-term skilled careers. Emerging assets, such as the

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University of Wolverhampton’s Springfield Campus – set to be the largest construction

and built environment campus in Europe – will critically support this sector drive.

8.75 We will work with the sector to accelerate the use of data and innovative processes and

products in the construction industry - enhancing process innovation via modern

methods of construction, including through the MTC Core Innovation Hub, building

information modelling and modular build. Incorporating innovation in houses as they

are being built, working with housing associations and other providers. Given the

significant housing and infrastructure investments coming into the region, and our

emerging cluster specialism, the West Midlands has a unique opportunity to boost

quality, sustainability and productivity through the utilisation of modern methods of

construction.

8.76 We will maximise the opportunity of HS2 to create regional supply chains and the skills

both to service HS2 (including through the national HS2 college) and wider

infrastructure projects to include a long-term rail/infrastructure strategy along with

dedicated support to address both supply and demand side challenges ensuring our

businesses benefit fully from HS2 opportunities.

8.77 Through a national Centre of Excellence for Commissioning we will drive

procurement excellence, social and environmental value and innovative behaviour

through contracts, particularly focussing on construction and digital infrastructure.

National Brownfield Institute and Springfield Campus case study

The development of strategic sites of employment and housing land is one of the key priorities identified within the West Midlands. In 2015 a feasibility study showed that the market would benefit from, and support, the development of a Centre of Excellence in brownfield development.

A crucial asset for tackling land availability shortages for housing and employment land is the National Brownfield Institute at the University of Wolverhampton. It’s home to a team of specialist researchers, consultants and industry experts who will advise on all aspects of brownfield development from dealing with contaminated land to repurposing buildings and sites.

The National Brownfield Institute will be a part of Wolverhampton’s developing Springfield Campus. The site of the former Springfield brewery is being transformed into Europe’s largest specialist construction and built environment campus, bringing together businesses and the education sector to maximise impact on the economy. As the home of the West Midlands Construction University Technical College, the University’s School of Architecture and Built Environment, and the Elite Centre for Manufacturing Skills, Springfield Campus is a central part of the region’s growth ambitions, particularly in the construction sector – this is further supplemented by Dudley Advance II, Dudley College’s new centre dedicated to advanced Building Technologies.

54

Employment Land

8.78 The West Midlands Land Commission (WMLC) concluded that the “shortfall of land for

employment space is at least as pressing as the shortage of land for new homes, and

possibly more so”. This is felt most strongly for strategic employment sites – those that

can bring net additional activity and jobs to the region. Similarly, there is a challenge

for incubation space as well as grow on space to support agile and mobile economic

activity. These issues are most severe in Coventry and Warwickshire, but across our

region there’s a significant gap in good quality employment land for our industries. The

Black Country Land and Property Investment Fund (LPIF) aims to provide a solution to

the shortfall through investment in projects which will support the re-use of brownfield

land and buildings and the delivery of supporting infrastructure. Through this

investment, the re-development of major employment land sites, such as Phoenix 10 in

Walsall and the proposed extension of i54 in Wolverhampton, can help underpin the

region’s industrial sectors, creating jobs and long-term prosperity.

8.79 As well as £10bn worth of existing opportunities in identified investor-ready sites, the

West Midlands will implement a strategic programme of employment land

development, based on up to date evidence of requirements in different parts of the

region. Further work is underway to scope out the need for employment land through

the West Midlands Strategic Employment Site Study 2019.

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9 Commitments and Implementation

9.1 The impacts the actions outlined above are designed to achieve are not just

quantitative. The actions in this strategy are based on our commitments to an inclusive

and successful future West Midlands. This is the future of the West Midlands that we

are determined to deliver.

9.2 High employment with more good jobs and accessible opportunities, where more

people and communities benefit and leadership in business and public life is more

diverse. A net fiscal contributor to the UK, where wage growth has been driven by value

chain progression and productivity gains, including through improved health and

wellbeing, and with more home-grown high growth businesses. Our high quality and

responsive regional education and skills system will be recognised by individuals and

businesses as providing the opportunities, pathways, skills and retraining needed to

take advantage of future growth and a changing world.

9.3 We will have delivered the 2022 Commonwealth Games and City of Culture, using them

to further promote the strong West Midlands tourism offer, and to showcase

autonomous transport innovation, new 5G enabled services for visitors, businesses and

residents and with both leaving a lasting legacy of business and community benefits.

Infrastructure within these major events and elsewhere will be delivered through the

use of modern methods of construction by our innovative firms, and we will harness

our emerging expertise in brownfield land development to deliver world-class

employment land that will underpin sustainable industrial success.

9.4 The West Midlands will be renowned for the improvements we make to our natural

environment, with improved natural capital and biodiversity. Population growth will

be supported by new, connected communities, with a choice of high-quality housing

and access to high quality green space. We will have a network of prosperous and

vibrant town centres, supporting and addressing the changing consumer and leisure

activities of our residents and visitors. Our clean growth will be supported by

innovative and successful new approaches to energy generation, storage and

distribution, integrated with our transport system and major employment sites that

meet our energy needs.

9.5 As the home of mobility and transport innovation in the UK, we will be the national

centre for connected and autonomous vehicles, electric motor and battery manufacture

for the full range of electric vehicles, supported by successful supply chain adaptation,

and the highest electric vehicle adoption and Connected and Autonomous Vehicles

share of vehicle use anywhere in the UK.

9.6 Our expertise will have created a fully integrated, multi-modal and smart transport

network, enabling seamless travel across the West Midlands, dramatically reducing

congestion and journey times and ensuring that every part of the West Midlands is close

to local and national opportunities, and the rest of the world via air, road, rail and digital

56

at UK Central’s international gateway. We will have the best ultrafast and 5G networks

in the country, which will have led the way in developing new services and markets.

9.7 We will be a pre-eminent national centre of creative content, techniques and

technologies, helping firms locally, nationally and globally to continue to innovate

across disciplines, transferring skills and techniques generated in our gaming, content

production and design firms and anchored by institutions, world class facilities and

networks.

9.8 The UK centre for the innovation, translation and real-world evaluation of new

diagnostics, devices and healthcare technologies (including AI), enabled through a

partnership with our large, stable and diverse population. A global life sciences cluster

complementing and working in partnership with the London cluster centred around

Euston just 38 minutes away.

9.9 We will continue to be a renowned 21st century manufacturing and engineering centre,

as the UK’s leading exporting region with strong and successful supply chains. And our

firms across sectors will enjoy an easy to access competitive support system with

demand lead innovation where businesses and people come to develop new products,

processes and services, backed up by supportive investment in employment land

initiatives. Supported by the business, academic and public partnerships needed to

drive new ways of doing things and new products.

Implementation

9.10 Through the West Midlands Combined Authority the region has a proven governance

and delivery structure. This combines integrated investment planning against the

metrics we have set, with delivery structures designed to meet the specific

requirements of individual issues or programmes. Implementation will be coordinated

by the Strategic Economic Development Board, reporting to the CA Board, which will

continue to review operation as Government arrangements for future growth and

infrastructure funding are developed.

9.11 We will measure progress against the core metrics set out in Annex 1, which will

continue to evolve further as we develop new approaches measuring and prioritising

improvements in inclusive growth, natural capital and biodiversity.

9.12 In the months ahead the CA, its constituent and non-constituent members, LEPs,

Universities, business and community groups will work together to keep this strategy

up to date and drive implementation of both new programmes and established

priorities. This includes through the development of the inclusive growth roadmap.

9.13 Our emerging sector action plans will provide a focus for private sector led delivery of

aspects of this strategy within different areas of our economy and, in tandem with

businesses and industry trade bodies, we will further develop these A successful

industrial strategy will ultimately be driven by the private sector.. This strategy has

been developed in partnership with business and they will be essential to its

57

implementation across the region, working in partnership to deliver an inclusive and

successful future West Midlands

58

10 Annex 1

The WMCA Performance Management Framework10

Outcomes Measures of

Success Where we are now

Change over the last year

Direction of Travel

Relative to UK

average since 2013

Scale of the Challenge

Source

ECONOMIC GROWTH -

Improved GVA for the region in line with the UK

average

O1. GVA per Head

£22,443 +£671

+£2,308

+11.5% WMCA

+9.1% UK

GVA per head £26,621

+£4,178 GVA per head

ONS (2017) Balanced Gross Value Added (GVA) for Local Enterprise

Partnerships

O2. GVA per Hour11*

£28.90 +£1.10

+£2.10

+7.4% WMCA

+6.0% UK

GVA per hour £32.60

+£3.70 per Hour

ONS (2018): Sub regional Productivity: GVA per hour worked

by Local Enterprise Partnerships, 2004-2016

O3. GDHI per Person*

£16,295 +£115

+£1,287

+8.6% WMCA

+8.5% UK

£19,432 GDHI per Person

+£3,137 GDHI per Person

ONS (2017): Regional Gross Disposable Household Income

(GDHI) by Local Enterprise Partnerships, 1997 - 2016

BUSINESS - Improved the

productivity of our businesses

focussing on our growth sectors

FISCAL - Secure better for less

from our public services

B1. GVA per employee

£49,937 +£1,077

+£3,022

+6.4% WMCA

+4.5% Eng

GVA per employee =

£56,783

+£6,846 GVA per employee

ONS Balanced Gross Value Added (2017) for Local enterprise

Partnerships

ONS Business Register and Employment Survey for years 2009-

2016

B2. GVA in transformational sectors

£66bn +£2.6bn

+£9bn

£147bn WMCA SEP Ambition

+£80.8bn GVA

EIU have applied the proportion of GVA by sector from the Oxford

Economic Model and applied to the ONS GVA figures

10 The green shading illustrates indicators which have moved in a positive direction compared to the UK average or national (England)

where UK averages are not available. The red shading indicates the reverse and orange indicates a growth rate in the right direction but less than the UK or national average.

11 * New PMF Indicator for 2018

59

Outcomes Measures of

Success Where we are now

Change over the last year

Direction of Travel

Relative to UK

average since 2013

Scale of the Challenge

Source

+15.9% WMCA

+11.8% UK

B3. No. of Business Births

27,550

business births

67 per

10,000

population

+5,120

business births

+8,745

business births

+46.5% WMCA

+19% UK

Ahead of UK

63 per 10k population

+1,618 births per annum

ONS UK Business Demography, 2017

B4. Five - year Business Survival Rate of businesses born in 2011*

43.8% -6.9pp -31.48pp WMCA

-31.5pp UK

44.1%

ONS UK Business Demography 2017

B5. Jobs in Transformational Sectors

1.2m +24,646 jobs

+106,979 jobs

+9.5% WMCA

+8.1% Eng

1.5m WMCA Transformational

SEP Ambition

+ 236,120 transformational

jobs

Oxford Economic Model

B6. Total Jobs

2m +36,178 jobs

+131,457 Jobs

+6.9% WMCA

+ 7% Eng

2.4m WMCA SEP Total Jobs Ambition

+364,165 Jobs

Oxford Economic Model

B7. Employment Rate

71% +2.2 pp

+3.7 pp WMCA

+3.5 pp UK

Employment rate = 74.7%

+3.7pp

Annual Population Survey (2018) January – December 2017

60

Outcomes Measures of

Success Where we are now

Change over the last year

Direction of Travel

Relative to UK

average since 2013

Scale of the Challenge

Source

F1. Income & Exp. Balance

-£2.7bn

-0.5 bn N/A

To achieve no fiscal gap

+£2.7 bn

PEOPLE - Improved Life Chances for all

P1 – Reduce % of people in top 10% most deprived areas

20% +0.0007 pp +0.002 pp

WMCA 10% of people

Public Health England Profiles, 2017

P2. – Better employment, health and wider outcomes for people with complex needs

Under development

P3. (i) Annual average earnings of full-time working residents

£27,574 + £472

+£1,695

+6.55% WMCA

+6.47% Eng

+ £1,184

Nomis: ONS Annual Survey of Hours & Earnings, 2017

(ii) % of employees earning above UK living wage

75.7% NA NA +1.1pp

ONS user requested data - Annual Survey of Hours and Earnings

(ASHE) - Number and percentage of employee jobs with hourly pay

below the National Living Wage, by local authority, UK, April 2016

SKILLS - Improved skill levels at all

ages so that people have the

skills and qualifications to

access jobs. Ignite /Retune

/Accelerate

P4. % of Working Age Population (WAP) with No Qualifications

11.4% 289,300 people

- 1.7 pp - 40,500 people

- 3.2 pp - 73,900 people

- 1.6pp UK

- 3.4pp - 86,036 people

ONS Annual Population Survey, 2018

P5. % of WAP with NVQ1

11.4% 288,800 people

-0.6 pp - 14,200 people

- 1.1 pp - 22,900 people

- 1.2pp UK

Ahead of UK % by

+ 0.7pp + 16,934 people

ONS Annual Population Survey, 2018

P6. % of WAP with NVQ2

16.9% 428,300 people

+ 0.1pp + 4,800 people

- 0.4 pp WMCA

- 2,300 people - 0.8pp UK

Ahead of UK % by

+ 0.9 pp + 21,772 people

ONS Annual Population Survey, 2018

P7. % of WAP with NVQ3

17.5% 445,800 people

+ 1.3 pp + 34,600 people

+ 0.1 pp + 9,800 people

+No change UK

Ahead of UK % by + 0.5 pp

+ 13,864 people

ONS Annual Population Survey, 2018

P8. % of WAP with NVQ4+

31.1% 790,800 people

+ 0.4 pp + 14,600 people

+3.55 pp + 103,000

people +3.5pp UK

+ 7.3 pp + 184,867 people

ONS Annual Population Survey, 2018

61

Outcomes Measures of

Success Where we are now

Change over the last year

Direction of Travel

Relative to UK

average since 2013

Scale of the Challenge

Source

P9. No. of Apprenticeships starts

42,470 + 400

+ 1%

+ 6,460

+ 17.9% WMCA

+12.5 % Eng.

84,000

+ 42,219 apprenticeships

ONS Annual Population Survey, 2018

P10. Progress 8 Score

- 0.12

(Below Average)

NA NA 0 (average score)

+ 0.12 points

Department for Education Main National Tables,2017

P11. NEETs aged 16-17

5,040

(7.8%)

(WM Met)

N/A N/A

6%

- 1,143 NEETs

Department for Education, 2017

P12. % of children achieving a good level of development at the end of reception*

67.0% +1.7%

+10.0% WM Met

+10.3% England

+3.7%

Public Health England Profiles, 2017

P13. Social Mobility Index*

Based on 326 Local

Authorities

Lowest Ranked: North

Warwickshire: 307

Highest Rank: Bromsgrove

48

All the West Midland Local Authorities in

the Top Quarter Ranking

GOV UK – Social Mobility Commission, 2018

HEALTH - Better quality of life for

all: improved health (inc.

Mental health) and well being

P12. Healthy Life Expectancy (HLE) at Births – Males & Females

Males (M) =

59.6 years + 0.32 years

- 0.3 years WM Met

+ 0.1 years Eng.

63.3 years

Public Health England, 2017

Females (F) = - 0.6 years - 0.9 years WM Met

63.9 years

62

Outcomes Measures of

Success Where we are now

Change over the last year

Direction of Travel

Relative to UK

average since 2013

Scale of the Challenge

Source

60.3 years - 0.05 years Eng.

Public Health England, 2017

P13. Reduced Inequality in HLE for Males & Females

Under development

P14. Health inequality gap by years between the most and least deprived areas

M = 7.4 years

F = 9 years

(WM Met)

M = + 1.2

F = - 0.9

M = + 1.3

F = - 1.3

No gap

Reduce gap by 7.4 years for males and 9

years for females

Public Health England, 2017

P15. Gap in employment rate for those in contact with secondary mental health services and the overall employment rate

58.9 % - 0.6 pp

+ 1.5 pp WMCA

+ 5 pp Eng.

Ahead of England % by

+ 8.3pp (67.2%)

NHS Digital 2017 Dataset: 1F - Proportion of adults in contact with secondary mental health services in

paid employment October 2016

P16 – Rates of suicide (per 100,000)

9.8 - 0.3 + 1.5 WMCA

+ 0.3 Eng.

No suicides

- 401 suicides

Public Health England, 2017

P17 - % Physically Active Adults*

57.0% -23,400

-1.2% NA

61.8%

+ 156,701 active people12

Active Lives, Sport England, 2018

CRIME - Reduced offending and re-

offending

P18 – No. of offenders per year

32,008

7.9 offenders per 1,000

population

(2014)

- 1,364

- 4.1%

- 7,170

- 18.3%13

Below the national average

Public Health England, 2017

P19 - Re-offending rates (per 100,000)

24.9%

(2014) + 0.3 pp

- 0.1 pp WMCA

- 1.2 pp Eng.14

Ahead of England

- 0.5pp

Public Health England, 2017

P20 – No. of first time entrants to Youth Justice System

443 - 2.5%

- 10.4% WM Met

- 27% Eng.

-116 first-time entrants

Public Health England, 2017

12 First Active Lives Survey was issued in 2017, therefore baseline data is unavailable. 13 Baseline is 2011. 14 Baseline is 2011.

63

Outcomes Measures of

Success Where we are now

Change over the last year

Direction of Travel

Relative to UK

average since 2013

Scale of the Challenge

Source

P21. Youth Claimants aged 18 - 24

16,265 +1,155

+7.6%

- 17,140

- 51.3% WMCA

- 55.1% UK

- 34%

- 5,499 youth claimants

Department of Work and Pensions, 2018

P22. Claimant Count aged 18 - 64

83,485 + 10,310

+ 14.1%

- 42,145

- 33.5% WMCA

- 39.5% UK

- 41%

- 34,018 claimants

Department of Work and Pensions, 2018

PLACE

ACCESSIBILITY- Improved the

connectivity of people to

businesses to jobs and markets

Pl1. Broadband Connectivity

95.6%

1.15m premises

+ 1.9 pp

+ 4.3pp WM Met

+ 16 pp UK15

100%

+53,339 premises

Ofcom Connected Nations, 2018

Pl2. % residents able to access 3 or more strategic centres including Birmingham City Centre, accessible by public transport within 45 mins travel time in the am peak

41%

(WM Met) - 0.4 pp - 3.6 pp

75%

+ 34pp

Transport for West Midlands 2017/18

Pl3. Journey time reliability

Under development16

INFRASTRUCTURE - Improved the quantity of high quality readily

available development

sites

Pl4. Mode Share of all Journeys:

i). Mode Share of all journeys by car, public transport, cycling & walking

i) Non-sustainable: Car (67%)

Sustainable:

Public Transport (10%)

Walk (20%)

NA

i) Non- Sustainable: Car +3% Sustainable:

Public Transport -1%

Walk – 2%

45% car mode share

Car (- 22%)

Transport for West Midlands, 2017/18

15 Baseline is 2014. 16 Transport for West Midlands is in the process of developing an effective monitoring approach for journey time reliability.

64

Outcomes Measures of

Success Where we are now

Change over the last year

Direction of Travel

Relative to UK

average since 2013

Scale of the Challenge

Source

ii). Percentage of car journeys single occupancy

Cycle (1%)

Taxi (2%)

ii) 82% (2014-2016)

Cycle No change

Taxi No change

ii) No change

(2013 to 2015 – 2014 to 2016)

Pl5. Total Dwelling Stock Estimates*

1,704,600

(2017) +11,480

+42,200 WMCA

+215,000

(by 2031)

MHCLG Live Tables, 2017

Pl6. Total Additional Affordable Dwellings*

2,850

(2016/17)

+520

+15,550 WMCA

(2012/13 – 2016/17)

MHCLG Live Tables, 2017

Pl7.Number of Additional Affordable Rented Dwellings*

1,590

(2016/17)

+320

+5,830 WMCA

(2014/15 – 2016/17)

MHCLG Live Tables, 2017

PL8. Ratio of median house price to median gross annual residence-based earnings*

6.86

(2017)

+0.20

+1.00 WMCA

+1.15 England

MHCLG Live Tables, 2017

SUSTAINABILITY - Resource efficient

economy to stimulate new

technology and business

E1. CO2 emitted within SEP area by transport, businesses and homes

21,696ktCO2 (2015)

-924ktCO2

-4.1%

-12.8% WMCA

-12.7% UK

WMCA target: 40% reduction in carbon by 2030

from 2010

-5,756 ktCO2

Sustainability for West Midlands, 2017

E2. No. of days poor air quality per year (rated 4 or higher on the Daily Air Quality Index)17

25 days

-15 days

-55.4% WMCA18

-38.1% UK

WMCA target: 1 day by 2030

-24 days

Sustainability for West Midlands, 2017

17 Number of days is measured by region 18 Baseline data is 2011

65